Probate is a state court administered process that transfers the estate of a deceased individual to named or remaining heirs. An estate is made up of the decedent’s real estate, personal property, life insurance, bank accounts, investments and personal belongings.
In probate court, an executor (if there is a will) or an administrator (if there is no will) is appointed by the court as a representative to collect the assets, settle any outstanding debts and then distribute any of the decedents (the person who passed) remaining assets to the beneficiaries. All matters of probate are reviewed by the state court. Each state has their own probate laws that dictate how the affairs of an estate are to be handled. Depending on the state (where the decedent resided), area and the complexity of the estate; probate can take anywhere for seven months to multiple years to complete.
There are seven standard stages in the probate process:
- Stage 1 – Filing a petition in probate court and having probate initiated
- Stage 2 – Issuing notices to heirs and creditors
- Stage 3 – First probate hearing occurs and the proving of the will
- Stage 4 – Collection of the decedents assets / estate assets
- Stage 5 – Paying of creditor claims
- Stage 6 – The filing of taxes for the estate
- Stage 7 – Probate court closes the estate and any remaining assets are distributed to the heirs of the estate
The following is a more detailed explanation of the 7 steps of probate. When a person passes away, their assets and property will be distributed to any named heirs. In order for these assets to be distributed fairly a state probate process takes place. The probate process helps to ensure that all heirs are located, all of the decedents assets are accounted for and the creditors and taxes are paid for the estate.
The 7 Steps of Probate
Probate Step 1: Filing a petition in probate court and having probate initiated
The first step of probate involves filing the necessary paperwork with the court. The probate petition paperwork should be filed with the appropriate court in the county where the deceased was living when they passed. Once paperwork is filed and reviewed by the court, a hearing will be scheduled. It typically takes approximately 30 days for the hearing to occur. The petition for probate must include the decedent’s death certificate and the last will and testament if one is available. The court will determine who will act as personal representative or administrator of the estate and the probate case is officially opened.
Probate Step 2: Issuing notices to heirs and creditors
The second step of probate involves the publication of a notice of hearing after a probate petition is filed with the court. The probate process must allow time for creditors and potential heirs to be notified and submit their claims. The probate personal representative / administer is required to post a notice in the newspaper alerting any creditors of the deceased and setting a date for claims to be filed with the court.
Probate Step 3: The first probate hearing occurs and the proving of the will
The third step of probate is the proving of the will. A self-proving will is a will that permits a probate court to accept it as the genuine will of the decedent (the person who passed). A will is proved and is admissible to probate provided that it was properly prepared and executed according to the laws of the state where the person resided. At the time that the last will and testament was signed, the decedent must have been of sound mind, and must not have been under any undue influence. If the will is not self proving, it is up to the court to prove the will.
Probate Step 4: Collection of the decedents estate assets
The fourth step in probate is the inventory and collection of the estate assets. One of the responsibilities of the personal representative is to create an estate inventory. An estate inventory is a ledger of all of the possessions of an estate. Items in an estate inventory often include the following:
- Real Estate including the decedents primary residence, second home, investment properties or land
- Motor vehicles such as automobiles, motorhomes, boats, tractors and motorcycles
- Life Insurance Policy Distributions
- Retirement accounts such as 401K plans, IRAs and Roth IRAs
- Investments such as stocks, bonds, ETFs, mutual funds and crypto currency
- Cash and bank accounts such as checking accounts, online accounts such as PayPal, savings account and certificates of deposit
- Important personal property and possessions such as family heirlooms, collections, time pieces, jewelry, and furniture
- Business ownership interests
Probate Step 5: The paying of creditor claims
The fifth step in probate process is the settling of estate debts and the paying of creditors. During the second step of probate, the creditors were informed about the passing of the decedent and the pending distribution of the estate. The creditors must submit a claim for payment once the representative has given notice about a death. Each state determines how long a creditor has to submit a claim for payment to the estate, but it is typically 3-4 months from the notification date. All valid creditor claims are then paid from the estate assets.
Probate Step 6: The filing of taxes on behalf of the estate
The sixth step in the probate process is the payment of any due taxes to the federal and / or state government. After the creditors have been paid, the probate personal representative must pay any due estate and income taxes.
Probate Step 7: Probate court closes the estate and any remaining assets are distributed to the heirs of the estate
The seventh and final step in the probate process is the closing of the estate. The estate closure process involves the submission of an accounting of all transactions taken by the personal representative with regard to the estate. This accounting includes all fees to be paid to lawyers as well as any other representatives required to assist in the closing of the estate. The court then reviews the submission, approves the filing and closes the estate. Once the estate has been closed, the remaining estate assets can then be distributed to heirs.