What Is Pro­bate and How Does It Work?

Estate plan­ning expert Liza Hanks gives you the facts about pro­bate: what it is, what it’s for, and why courts don’t always require it.

What Is Probate?

Pro­bate is how a court set­tles the estate of some­one who has died. The judge appoints some­one, called an execu­tor or per­sonal rep­re­sen­ta­tive, to han­dle the fol­low­ing tasks:

• gather and value the estate’s assets
• pay bills and any taxes due, and
• dis­trib­ute prop­erty to heirs or beneficiaries.

If you make a will before you die, you can nom­i­nate your execu­tor or per­sonal rep­re­sen­ta­tive. The judge will almost always fol­low your sug­ges­tion when mak­ing the offi­cial appoint­ment. If you die with­out a will, how­ever, the court will decide who your execu­tor will be — usu­ally your sur­viv­ing spouse, one of your adult chil­dren, or another close rel­a­tive if you are sin­gle with­out grown kids at the time of your death.

The Pur­pose of Probate

The pur­pose of pro­bate is to pre­vent fraud after some­one’s death. (Imag­ine every­one loot­ing the cas­tle after the Lord dies.) The pro­bate process freezes the estate until a judge deter­mines that the will is valid and the execu­tor has:

• noti­fied all rel­e­vant people
• iden­ti­fied and appraised all the prop­erty in the estate, and
• paid all debts and taxes out of the estate’s assets.

After all of that’s done, the court issues an order dis­trib­ut­ing the prop­erty and closes the estate.

Many Estates Can Avoid Probate

Not all estates must go through pro­bate. First, if the value of an estate falls below a cer­tain thresh­old, it is con­sid­ered a “small estate” and it does­n’t require court super­vi­sion to be settled.

Sec­ond, not all assets are sub­ject to pro­bate. Some kinds of assets, like assets held in joint ten­ancy, trans­fer auto­mat­i­cally when an owner dies. And some kinds of prop­erty that allow you to name a ben­e­fi­ciary go directly to the per­son you name. Exam­ples include retire­ment accounts, life insur­ance, and payable on death accounts. A good estate plan­ning adviser can help you take advan­tage of meth­ods like these to pass your prop­erty as quickly and inex­pen­sively as possible.

Finally, if you make a liv­ing trust to hold your largest assets, that prop­erty won’t go through pro­bate unless the prop­erty you pass out­side of the trust adds up to more than your state’s small estate limit.

More Infor­ma­tion

For details about your state’s pro­bate pro­ce­dures see What You Need to Know About Pro­bate in Your State in Legal Con­sumer’s Inher­i­tance Law learn­ing cen­ter.

Liza Han­ks’s most recent book is Every Cal­i­for­ni­an’s Guide to Estate Plan­ning. To con­nect with her directly, visit www​.liza​hanks​.com.