What Is Probate Court?

Probate court is a segment of the judicial system that oversees the execution of wills as well as the handling of estates, conservatorships, and guardianships. Probate court also handles the commitment of a person with psychiatric disabilities to institutions designed to help them.

Probate court ensures that a will is executed according to the wishes of the individual who has passed away. It makes sure that all debts owed are paid and that assets are distributed properly. The court oversees and usually must approve the activities of the executor appointed to handle these matters.

In addition, when a will is contested, the probate court is responsible for ruling on the authenticity of the document and the cognitive stability of the person who signed it. If no will exists, the court also decides who receives the decedent's assets, based on the laws of the jurisdiction in place.

Understanding Probate Court

The term "probate" is used to describe the legal process that involves the handling of the estate of a recently deceased person. Broadly, the role of the court is to make sure that their debts are paid and their assets are distributed to the correct beneficiaries, according to the decedent's wishes as detailed in a will.

Probate is multifaceted in that it refers to the overall legal process of dealing with a deceased person's assets and debt, the court that manages the process, and the actual distribution of assets. Individual states have rules concerning probate and probate courts. Some states do not use the term "probate" but instead refer to a surrogate’s court, orphan’s court, or chancery court. It's important to review the laws regarding probate in the state in which a will is to be probated before death (if you're creating a will) and after death (if you are a beneficiary or executor).

Many local courts offer complete instructions concerning probate. For example, the New York State Unified Court System allows individuals to search by their county and type of court to begin the probate process.

What Goes Through Probate?

Probate is usually necessary for property that is titled only in the name of the person who passes away. For example, that might include a car or real estate. It's also usually necessary for an interest in any property that is owned as tenants in common.

Assets That Don't Require Probate

Here are some of the assets that don't need to be probated, according to legal information expert, AllLaw.

• IRA or 401(k) retirement accounts with designated beneficiaries
• Life insurance policies with designated beneficiaries
• Pension plan distributions
• Assets assigned to a living trust
• Funds in a payable-on-death (POD) bank account and payable-on-death U.S. savings bonds
• Securities designated as transfer-on-death (TOD)
• Wages, salary, or commissions owed to the deceased (up to an allowable limit)
• Vehicles intended for immediate family (under state law)
• Household goods and other items intended for immediate family (under state law)

The Probate Court Process

A formal probate process involves specific, usually straightforward steps. Issues that may arise during the process can lengthen the time it lasts until it is closed by the court.

• Probate is initiated when a person files a petition for probate with the state's probate court system. The petition is normally filed by the executor of the deceased's will or by a member of the deceased's family.
• The person filing the petition must also file the original will and a copy of the certified death certificate.
• In the initial hearing, the probate court appoints the executor for the deceased's estate. The executor (or administrator, if there's no will) is responsible for distributing the deceased's estate to the proper beneficiaries, among other administrative duties. The court provides the executor with Letters of Testamentary (or Letters of Administration). They give the executor the authority to pay bills, sell assets, and perform other tasks. 
• Before accepting the Letters and performing their duty, the executor may need to post bond (to protect the estate from any adverse consequences of their actions).
• A second hearing may be required if any objections concerning the will are raised.
• The executor then proceeds to notify those to whom the deceased owed money (creditors), notify beneficiaries, inventory the deceased's assets, pay outstanding bills, sell assets if necessary to pay what's owed, pay taxes, and file a final tax return.
• Once those tasks are completed, the executor distributes the remaining assets to the beneficiaries, according to the will. 
• The probate court oversees the executor's activities and handles issues that may arise. For instance, if the executor objects to a claim, the court will hear the evidence and make a ruling. 
• The executor normally must provide an accounting of exactly how the estate was handled. Once this is approved by the court, it closes the probate process.

An informal probate process, also called summary probate, that requires less court oversight can be used if the estate is small, the will is simple, all parties are in agreement with it, and no objections are raised. The will and death certificate still must be filed in this instance.

Probate Court Without a Will

When a person dies with no will, the probate court distributes that person's assets to their next of kin, according to the relevant state's probate laws. This is known as the law of intestate succession. It outlines the distribution of assets between surviving spouses, children, grandchildren, siblings, parents, aunts, uncles, and other relatives.

The Costs of Probate Court

A probate lawyer is often hired to help deal with the intricacies of probate. Other costs of probate can include court filing fees, costs for publishing a death notice, and an executor's fees. If the estate is large and complicated, the assistance of an accountant may be needed. The deceased's estate lawyer may also need to be involved. Costs will mount the longer the probate process takes to complete. In general, the process can take six months to a couple of years.

How to Avoid Probate Court

Understandably, people want to avoid or shorten the probate process, if possible. This can be done by setting up a living trust, assigning your assets to it, and designating beneficiaries for those assets. A living trust is an estate planning tool that can help you avoid the usually lengthy, sometimes costly, and always public nature of probate.

You can keep financial assets out of probate court by designating beneficiaries for them in the account paperwork held by, for example, your life insurance company, retirement plan, brokerage, and bank. This way, funds will flow directly to the beneficiaries upon your death.

In addition, to avoid probate of money you'd like to leave to beneficiaries, consider gifts during your lifetime. People can give individuals tax-free money in the form of gifts, as defined by the Internal Revenue Service (IRS). In 2022, the maximum allowable amount is $16,000 ($17,000 in 2023) per person before a gift tax return must be filed.

Frequently Asked Questions

The Bottom Line

After someone passes away, the grief over their loss can be all-consuming for the remaining family and friends. Unfortunately, the probate process can add an additional burden; one that's financial and administrative. With or without a will, the probate process is essential to understand to ensure that all of one's affairs are in order prior to death.