When grieving the loss of a loved one, settling an estate is probably the last thing on your mind. But paying bills, closing accounts, selling real estate, and filing the deceased’s final taxes all need to be done. And you want to be sure everything is handled correctly to honor their legacy.
But how do you know if the estate needs to go through probate? Maybe you’ve heard the term probate, but aren’t quite sure what it means. In this two-part series, we’ll walk through the basics of probate, when it’s needed, and when it can be avoided.
What is Probate?
Put simply, probate is the court process of settling an estate after someone passes. Each estate is unique and varies on the level of court involvement needed. Basic probate may only be required to authenticate the will, but more cumbersome scenarios can require court approval every step of the way. For example, complex probate could involve locating and determining the value of assets, paying bills, filing taxes, and distributing money to heirs.
No matter the situation, if the deceased had no will or left behind assets without naming a beneficiary, then probate may be required. Accounts and property with no clear heirs needing probate include:
- Real estate or land
- Bank or credit union accounts
- Investments such as stocks, bonds, or retirement accounts
- Tangible property including clothing, jewelry, furniture, and vehicles
If you’re unsure whether an estate needs probate, it’s smart to sit down with a trusted estate planning attorney who can guide you through the process. Whether you receive legal help or not, the first step is for the executor to file what’s called a “petition for probate.” This gives the executor official permission to act as the personal representative and handle the estate administration. If there is no will, the court will appoint a personal representative (usually a close family member of the deceased). From there, the court will decide which type of probate process is needed: unsupervised or supervised.
Unsupervised probate is just like it sounds; the court doesn’t oversee the estate administration. The personal representative can sell or lease real estate, sell assets, file taxes, and distribute money to heirs without needing the court’s approval. Of course, the executor still needs to follow the will’s instructions, but the court doesn’t need to be involved. Unsupervised probate is generally a more straightforward process, and you can go this route if:
- The estate is solvent, meaning it has more assets than debts
- The will requests unsupervised administration (or doesn’t request supervised)
- The personal representative is competent
- Nobody contests the will
- The heirs agree to it
Supervised probate requires the court to manage every step the executor takes to settle the estate like paying off debts, selling real estate, tax filings, and allocating assets to heirs. As you can imagine, supervised probate takes considerably more time and costs more money. You may need a supervised process if:
- There’s no will and heirs are unknown
- Beneficiaries are arguing over the will
- The estate has more debt than assets (bankrupt)
- The estate assets are hard to valuate (unusual real estate, collectibles, etc.)
- The will is unclear or contested
Estate administration can be a tedious endeavor whether an estate goes through unsupervised or supervised probate. For many, avoiding probate altogether is the fastest and cheapest way to resolve a loved one’s final wishes. In part two of our probate series, we’ll explain which kinds of assets can avoid probate, and also give tips for creating your estate plan.
Have more questions but unsure where to begin? Reaching out to an experienced estate planning attorney can save you time, money, and stress. We’d love to sit down with you and hear your story. Reach out to Cecelia Neihouser Harper at 765-637-9175.
Disclaimer: The content of this blog is intended to be general and informational in nature. It is advertising material and is not intended to be, nor is it, legal advice to or for any particular person, case, or circumstance. Each situation is different, and you should consult an attorney if you have any questions about your situation.