Unless you’ve created a proper estate plan, when you’re gone, before any of your belongings are distributed, many of your assets must first pass through the court process known as probate. Like most court proceedings, probate can be time-consuming, costly, aggravating, and open to the public. Avoiding probate—and keeping your family out of court—should be a primary goal of most estate plans.
Probate typically involves the following:
Determining the validity of your will (if you have one).
Appointing an executor or administrator to manage the probate process and settle your estate.
Locating and valuing all of your assets.
Notifying & paying your creditors.
Filing & paying your taxes.
Distributing your assets to the appropriate beneficiaries.
In most cases, going through all of these steps is very difficult for the people you love. It’s expensive, can take a long time, and be highly disruptive and inconvenient, and sometimes, can be messy.
By implementing the right estate planning strategies, however, you can help your loved ones avoid probate all together—or at least make the process extremely simple for them. To spare your family from the time, cost, and stress inherent to probate, here in this two-part series, we’ll first explain how the probate process works and what it would entail for your loved ones, and then we’ll outline the different ways you can avoid probate with wise planning.
When Probate Is Required
As mentioned previously, if you fail to put in place a proper estate plan, your assets must go through probate before they can be distributed to anyone. In general, this includes those individuals who have no estate plan at all, those whose estate plan consists of a Will alone, and those who have a Will the court wont’ accept.
You can see that even if you have a Will in place, your loved ones will still be subjected to probate. If you want to keep your family out of court and out of conflict you cannot rely solely on a Will, and you’ll need to put in place additional estate planning tools.
Without a Will, probate is still required to pay your debts and distribute your assets. However, regardless of your wishes, your assets will be distributed to New York’s statute of inheritance. If no living heirs can be found, then your assets go to the state.
How Probate Works
Whether you had a Will or not, the probate process is similar.
- Authenticating The Validity Of Your Will: With a Will, following your death, your executor is responsible for filing your Will with the court, to initiate the probate process. From there, the court must authenticate your Will to ensure it was properly created and executed in accordance with state law, and this may involve a court hearing.
All beneficiaries named in your Will, and all those who inherit under state law, in the absence of a Will, must get notice of the Will filing. This allows people to contest the Will’s validity which can prevent the Will from being probated, and then it’s as if there were no Will at all.
- Appointing The Executor Or Administrator: With a Will, the court formally approves and appoints the person you named in your Will as your executor before they can legally act on behalf of your estate. Without a Will, the court will appoint an administrator.
In some cases, the court might require your executor to post a bond before they can serve. The bond functions as an insurance policy to reimburse the estate in the event the executor makes a serious error during probate that financially damages the estate. Not everyone can qualify for a bond.
- Locating & Valuing Your Assets: Once probate begins, the executor must identify, locate, and take possession of all of your assets, and appraise them for a total value. This includes not only those assets listed in your Will and other estate planning documents, but also those you may have not included in your estate plan. This is why keeping a regularly updated inventory of your assets is so important.
Any assets the executor is unable to locate will end up in our state’s Department of Unclaimed Property. Across the U.S., where more than $58 billion of assets are stuck in state Departments of Unclaimed Property. As your Personal Family Lawyer, we will not only help you create a comprehensive asset inventory, we work to make sure this inventory stays updated throughout your lifetime.
- Paying Creditors and Filing & Paying Your Taxes: In addition to paying all of your outstanding private debts and funeral expenses, the executor is also responsible for filing and paying any outstanding taxes you owe to the government at the time of death. This includes personal income and capital-gains taxes, as well as state and federal estate taxes, if your estate is valuable enough to qualify.
- Distribution Of Your Remaining Assets: Once all assets have been distributed, the executor must file a petition with the court to close probate. If all creditors and taxes have been paid, your assets have been distributed, and there are no other outstanding issues to be addressed, the court will issue an order formally closing the estate and terminating the executor’s appointment.
Keep Your Family Out Of Court & Out Of Conflict. One of our primary goals when creating your estate plan is to keep your family out of court and out of conflict no matter what happens to you. Fortunately, it’s easy for you to spare your family the burden of probate with proactive planning. Next week, we’ll look at the ways you can do just that in the second part of this series. Until then, if you haven’t put an estate plan in place or have one that would force your family to go through probate, call today 718-514-7575.
We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.