What is Probate?
Probate is the legal process admitting the will. Then following the instructions in the Will under court supervision. Probate is when the Courts decide what will be done with our property after we pass. Since we cannot sign away our property anymore, the Court has to sign for us. The law has a way to transfer our property and pay off any valid debts we have left behind.
Intestate succession is the process when there is no will or trust (or an unfunded trust). And the court must supervise every little step. In this case, the state has laws that determine who gets what and how much. (This article will refer to both processes as probate for ease of reading).
Wikipedia defines it as follows:
Probate is the legal process whereby a will is “proved” in a court and accepted as a valid public document that is the true last testament of the deceased.
The granting of probate is the first step in the legal process of administering the estate of a deceased person, resolving all claims and distributing the deceased person’s property under a will. A probate court decides the legal validity of a testator’s (deceased person’s) will and grants its approval, also known as granting probate, to the executor. The probated will then becomes a legal instrument that may be enforced by the executor in the law courts if necessary. A probate also officially appoints the executor (or personal representative), generally named in the will, as having legal power to dispose of the testator’s assets in the manner specified in the testator’s will. However, through the probate process, a will may be contested.
Two Kinds of Probate
In Arkansas, there are two basic types of probate:
Small Estate Probate For Estates Under $100,000
If an estate qualifies, then a formal Court proceeding is avoided. This form of probate is simpler, quicker, and easier than the other proceeding.
- Everything we leave behind must be worth less than (or equal to ) $100,000. This includes bank accounts, savings, checking, cars, personal and most real estate.
- No debts can be left behind or must be paid off. I.e. Creditors are settled with.
- Medicaid has to be paid up and settled with.
- 45 days must have passed since death
If you believe your loved ones estate qualifies, then I will be happy to meet with you to discuss the situation. We can talk about it and decide on the steps that need to be taken.
Regular Probate For Estates Over $100,000
When an estate is worth even a penny over $100,000, the process is more complex. When you need a regular probate, please come in and talk to me as soon as possible. I can help you through the process and make it as easy as possible.
Testate vs. Intestate
When a person passes and has a Last Will and Testament, we call it testate.
If a person goes without a will, then it is called intestate.
Validity of the Will
If the Will is valid, then the Court will (usually) use the Will to divide up the property according to the wishes of the Will.
If the person was intestate, that is no Last Will and Testament, the Court will use the laws of Arkansas to decide how to divide up the property.
If a challenge is raised to the Will or the administration of the process, the process becomes VERY complex.
The Basic Process
First, somebody has to petition (ask) the court to start probate. The Court will read the petition and appoint a personal representative to work the steps of probate. The personal representative (executor/executrix) will work closely with their attorney. Once approved, the court will issue Letters Testamentary (testate) or Letters of Administration (intestate). You should keep these in a safe place and only bring out the original if some place will not accept a copy. The Letters are proof that you are the authorized agent to make decisions on behalf of the estate.
The Complex Process
Next, you will work closely with your attorney to get through the complex process of probate. Many steps must be done in the correct order and at the right time. If you forget a step, it could invalidate, or open the process to challenge. The deadlines must be met. The waiting periods must be honored. The proper newspaper advertisements have to be made.
All known creditors of the estate must be notified. A newspaper advertisement will have to be ran to notify any other creditors. Fortunately, the creditors must file their claims before the deadline for creditors. This keeps probate from stretching out any further than it has to. Any and all claims that are proper and correct will be paid out before any property is distributed to the heirs.
All the heirs of the estate must be notified. If there is a Will, you know who to notify. If there is not a Will (intestate), then you must look to the laws to decide who to notify. A good probate attorney will know who and who not to notify in your case.
Appraisals and Valuations
The property must be appraised by a qualified appraiser. Tax returns, both income and estate tax, must be filed in a timely manner.
Along the way, you must keep the court informed and notified of the steps that have been taken and what the results are.
Finally, waivers can be filed to simplify the process somewhat. But the rest of the steps must be done.
How Long Will It Take?
Expect 6 months or more. (I have personally worked a probate that was open for 21 years. Not the fault of anyone in particular, but one attorney moved away and left the process hanging. The next attorney just didn’t work the case…). It takes so long because:
- Mandatory waiting periods are built in. For example, you have to wait for the creditors deadline.
- Sometimes probate is challenged and lawsuits result
- Courts are backed up with cases and you have to wait for hearings
Finally, everything has been done. Your attorney will file the final papers with the Court. The attorney will ask the court for a final distribution of the property. Then, finally, the attorney will ask for probate to be closed.
Does Everything Go Through Probate?
The short answer is no.
Accounts that are “payable on death” or have a beneficiary designation pass outside of probate.
If your life insurance has beneficiary designations, that will pass outside of probate.
Joint bank accounts and other jointly owned accounts are not subject to probate.
Real estate owned in “Joint Tenancy” or “Tenancy by the Entirety” automatically pass.
However, real estate owned as “tenants in common” is subject to probate.
If you have recorded a beneficiary deed, that real estate will pass without probate.
Arkansas has passed the laws needed to pass automobiles outside of probate. As of August of 2016, we are still waiting on the forms to be created.
Misconceptions About Probate
If you have a will, you don’t go through probate. Wrong.
If there is anything but jointly owned property, the will has to go through probate. The good thing about having a will is that if you do have to go through probate, the will can make that process much easier and more streamlined. That usually translates to less costly.
Everyone has to go through probate. Wrong.
If there is no property, only jointly owned property, or proper planning has been done, then no probate.
The State gets everything if there is no will. Wrong.
The state has a set of rules, basically a will written for you, that tells the courts who gets what and how much.
Your Will and amount of property remains private. Wrong.
Probate is a public process.
A Will helps if you become incapacitated. Wrong.
A Last Will and Testament only becomes active upon death.