Most of us avoid thinking or talking about death, which is likely why “probate” is a foreign term for so many individuals. In fact, a recent Trust & Will study revealed that 60% of Americans are unsure what the probate process entails or don’t understand the process at all.
Unfortunately, death is universal.
“The research that I have seen will stun you,” shared writer, podcaster, and young widow Nora McInerny in a darkly comedic 2019 TED talk. “Everyone you love has a 100% chance of dying.”
You may not face a loss like McInerny’s in your life, but odds are you will move through probate on behalf of a loved one at some point.
“Probate essentially gives legal authority to execute the deceased person’s estate in an organized and legally binding manner,” Abel Soriano, the founder and managing attorney at Soriano Law in Salem, Oregon. “Its primary purpose is to ensure that the deceased person’s assets are distributed according to their wishes, as outlined in a will, or according to state law if there is no will.”
That last phrase is the very reason why Americans need to understand what probate is long before a loved one or they themselves pass away: When you avoid estate planning, the state will handle your estate — whether it aligns with your wishes or not.
Fortunately, there are ways to simplify the probate process for yourself and your loved ones, and perhaps even avoid it entirely.
Let’s start by addressing the question 60% of Americans don’t know how to answer: What is probate?
What is Probate?
In short, probate is the legal process that happens after someone passes away. It is a court-supervised procedure that determines how a deceased individual’s financial affairs — including their assets, debts, taxes, and such — will be distributed and settled.
“Probate serves as a safeguard to ensure the estate is administered fairly,” says Soriano. “Without probate, disputes could arise over who inherits assets, whether debts have been properly paid, or even whether a will is valid.”
The probate process officially resolves a number of financial matters:
Settle any disagreements about the validity of the decedent’s will.
Transfer ownership of the decedent’s property, vehicle(s), bank accounts, investments, and other possessions to the appropriate beneficiaries.
Pay any debts owed by the deceased individual and collect any debts owed to them.
Establish who will become the legal guardian of a child.
The Basic Steps of Probate
The probate process varies from state to state, but the personal representative, or executor, of the estate is responsible for initiating the process. This person is typically named in the decedent’s will, but if there is no will, then it’s often a family member, such as the decedent’s spouse or child.
According to Soriano, probate generally includes the following steps:
Appoint a personal representative: If probate were a literal journey, the personal representative would be captain. The personal representative, or executor, of the estate is responsible for handling the many duties affiliated with the probate process — alongside an attorney.
If the decedent had a will, it likely names the personal representative for the estate, but the judge formally appoints that individual. If there is no will, the court can also appoint a personal representative, often the closest relative.
File documents with the court: To initiate the probate process, the personal representative’s first duty is to file a few documents with the probate court in their county. This includes the death certificate, a will (if applicable), and a petition to officially begin the probate process.
There are a few different types of petitions based on the unique circumstances of a case, but a probate attorney can help you determine which is appropriate.
Identify all inventory in the estate: The personal representative’s most important job is to distribute assets and settle any unresolved debts or taxes on behalf of the deceased individual. This starts with identifying and listing the decedent’s assets, including real estate, bank accounts, and personal property.
Find beneficiaries and creditors: The personal representative is also responsible for locating any potential beneficiaries or creditors. If the decedent left a will, the beneficiaries should be easy to find and inform. However, creditors, if any, are typically more difficult to locate.
Pay the decedent’s taxes, debts, and fees: Another significant step in the probate process is handling any debts the deceased individual has left behind. Before assets can be distributed, debts, taxes, funeral expenses, medical costs, and such must be paid.
It’s imperative that the personal representative pay close attention to this step to protect the beneficiaries from any creditors searching for unpaid debts in the future.
Distribute the decedent’s assets: The final step of the probate process is distributing the assets of the deceased person to their beneficiaries, according to their will or state law. Once everything has been divided appropriately and all final paperwork signed, the probate court will officially close the estate.
How to Find Probate Laws in Your State
Probate laws vary from state to state, which is one of the many reasons 65% of Americans say they’d seek professional guidance to navigate the probate process. The probate laws for each state are collected as “Estate Codes” or “Probate Codes,” dictating that state’s specific laws surrounding topics like intestacy, living wills, power of attorney, and more.
Cornell Law School has compiled a list of links to the unique probate codes for each state, including the District of Columbia. However, 18 states have adopted the Uniform Probate Code, which outlines a consistent, regulated process for handling the financial affairs of a deceased individual.
5 Tips to Simplify (or Avoid) Probate
It’s easy to understand why handling the possessions of a deceased loved one would be emotionally taxing, but most Americans vastly underestimate the cost and time involved with settling an estate.
In the Trust & Will study previously referenced, 37% of survey respondents said they were unaware of how long probate lasts — 20 months on average — and a whopping 56% said they have no idea what probate costs — typically 3-7% of the total value of the estate.
Fortunately, a little effort today can help you not only shorten probate, but maybe even bypass it. “One of the best ways to simplify the probate process is by planning ahead,” says Soriano.
The list below and our “Wills, Trusts, and the Basics of Estate Planning” article can help you get started.
Place your assets in a living trust
There are a few ways to bypass the probate process entirely, but arguably the most common option is via a living trust. “When assets are placed in a living trust, they pass directly to the beneficiaries without the need for probate,” says Soriano.
Even with a will, you’ll still need to undergo probate to validate it. With a living trust, everything you own will legally belong to the trust… but as the trustee, you control the trust. When you die (or become incapacitated), your successor trustee(s) gains control of your trust and can distribute your assets, pay your debts, and so on, all according to your wishes outlined in the trust — without the court’s involvement.
Establish TOD or POD designations
Transfer-on-death (TOD) or payable-on-death (POD) designations work similarly to a living trust, but they’re designed specifically for certain investments and bank accounts, respectively. However, TOD and POD designations are not quite as comprehensive as a living trust, so it’s important to talk with your attorney to determine which estate planning tool is most appropriate for you.
Select beneficiaries for your accounts
Naming beneficiaries on accounts can also help simplify, and sometimes avoid, the probate process. When you neglect to identify beneficiaries for your accounts, ownership typically passes on to the closest family members, such as your spouse or children. By selecting beneficiaries for your bank accounts, investments, life insurance policies, and more, you make it abundantly clear who you want to receive these assets when you pass away.
If you have a living trust, you can name the trust as the beneficiary of some accounts, especially if you can’t retitle the account (such as retirement accounts).
Review your estate plan regularly
It’s also essential to regularly review and update your estate plan to account for major life changes, such as marriages, divorces, or the birth of children. Most Americans prefer to enlist the help of a probate attorney, like Soriano, for this process, especially since probate laws differ by state.
Communicate your plans to your family
The fact is most of us know we need to talk about our own death and the death of our loved ones — we’re just pushing the conversations off.
A Caring.com study revealed that in recent years fewer and fewer Americans have prepared any estate planning documents at all, but just like eating your vegetables and exercising regularly, estate planning is essential for every American.
It’s important that you communicate your wishes to your family members NOW. Prioritize these conversations! Don’t assume you’ll have a chance to explain later.
You should also create a “letter of instruction” to outline all of the details of your estate, such as where to find important documents, the name(s) and contact information of your lawyer(s), the location of specific account information and passwords, and so on.
Many of us avoid these uncomfortable conversations, but according to Soriano, “a little preparation now can save a great deal of time, expense, and stress for your family later.”
