Probate Administration

What is Probate?

Probate is the legal process where a court manages the distribution of the assets that you own (your “estate”) when you die after all of your bills are paid.

The probate process is the general administering of your Will or your estate if you die intestate (without a Will). The probate court will appoint the Executor (male) or Executrix (female) (also often called a “Personal Representative”) who is named in your Will, or it will appoint someone if there is no Will.

What does it mean to “administer” the probate of an estate?

Your Personal Representative (Executor) will need to collect your assets, pay any outstanding liabilities, and then distribute the remaining assets to your heirs, as determined by your Will, if you have one, or by statute if not.

How onerous the process of administering an estate depends on the state—the state of Arizona, for example, is known for having a very formal probate process, one that requires a significant amount of time and effort. The state of New Jersey, on the other hand, is much less formal and, while still requiring a lot of time and effort, is not as arduous as other states.

What are the benefits to avoiding probate?

There are some benefits to avoiding probate that you should look at. One big benefit of avoiding probate is the cost. Another benefit to avoiding probate is it can be a lengthy process. Probate fees are usually costly to your estate especially if you own property in other states. If that is the case, then you may likely have probate proceedings in multiple states. Avoiding probate altogether can speed up the process of settling your estate.

By having a written Will you can appoint the Administrator you want and direct how they are administer your estate. Everything still has to go through the probate process, however, which can involve disclosing information regarding the estate and everything is public record. There can also be significant delays in getting the probate process started, and nothing can be done until an Administrator has been appointed--that means bills might go unpaid, checks undeposited, funds inaccessible, and assets frozen in limbo.

If you use a Revocable Living Trust, you grant title to everything you own (why the person setting up a trust is commonly referred to as the “Grantor”) to the Trust while you are still alive, reserving the right to enjoy all of the benefits of everything (as beneficiary) and control everything as “Trustee” of the Trust. Probate is only needed to “pour over” any assets not put into the Trust prior to your death (using a simple “pour-over will”). If the Trust is properly funded and maintained--meaning title to everything is assigned to or taken in the name of the Trust, probating the pour-over will may be unnecessary. By properly establishing and maintaining your Revocable Living Trust, you can greatly simplify things for your loved ones upon your death.

What is a Living Trust?

A Living Trust is a type of document where a Trustee holds the legal title to and maintains an asset for the benefit of another person, referred to as a “beneficiary.” The beneficiary receives the benefits and enjoyment of the asset without directly owning it. A Trust will help you spell out what your desires are in regards to your assets, your heirs, and their dependents. Having a Trust in place will help you to avoid probate, reduce your estate taxes, and establish a long term property and asset management plan that will continue on long after you have passed. A Trust is especially well-suited for individuals who have a substantial amount of assets, a blended family, property in other states, and/or own a business. A Trust can also be a very effective planning tool for individuals who are not married. What are the benefits of a living trust?

One benefit of having a Trust in place is it can help you to avoid probate, which this means that your assets can distributed and divided up between your family and loved ones a lot faster and without having to go to court first. You can also avoid expensive and time-consuming guardianship or conservatorship proceedings, which may be necessary in the event you become incapacitated. Without a Trust, your loved ones will be unable to act on your behalf without getting a court order first. Using a Trust keeps things private, whereas only having a Will, which has to be probated, means everything filed with the court becomes public record. It will also force you to get organized--meaning less of headache for your loved ones when you die. It does typically cost more than only having a simple Will, but it is money well spent.