What Is Probate, And How Does It Work?
When an individual dies owning property in his or her name, that property generally must go through probate. Probate is a legal procedure that establishes ownership of property in others. The probate system is designed to ensure the validity of a will, give notice to all possible claimants of property and resolve ownership disputes and rights. Probate courts also distribute property not covered by a will (intestate estates) according to legal defaults. Some property does not require probate to change hands; joint tenancy property and contractual arrangements such as insurance policies and retirement accounts generally go directly to the surviving joint tenant or named beneficiary without probate oversight. Probate also is not required for assets held in trust.
The probate court first establishes whether the deceased left a valid will. If so, the probate process guides the division of property in accordance with the will’s provisions. If the estate is intestate or a will is found to be invalid, the probate division applies state laws to divide up the estate. The probate court signs off on the final accounting of the distribution, thereby finalizing the transfers of ownership.
Two Levels Of Probate
Informal probate covers estates that require no court supervision or adjudication due to their clear, undisputed nature and simplicity. This procedure allows the personal representative to accept full responsibility for promptly, completely and legally probating the estate with only minimal court oversight. Typically, the personal representative can act more quickly to divide the property under this process, with the probate court giving final approval once the estate is fully distributed. Personal representatives may apply for informal probate but should be aware of the possible legal liability for mistakes that their acceptance of the procedure involves.
Formal probate applies to more complex or contested estates and involves court supervision of distribution. The probate court supervises the personal representative on each legal step he or she takes to administer the estate, adding substantial time to the process. The personal representative may post a bond to guarantee his or her performance and protect the estate’s creditors. The court may need to hear and resolve conflicting claims to the estate assets or even find heirs when they are not apparent. The court scrutinizes each distribution. While this procedure takes far more time, it is indispensable when disputes and complex issues are involved.
Most personal representatives hire a lawyer to help them with at least some of their duties, even in informal probates. While making a will does not prevent the need for probate, a carefully drafted will minimizes the time a personal representative spends in court and speeds up the distribution of property to survivors.