Glossary of Important Probate Terminology

Probate

When a person dies, their last will and testament (assuming they prepared one in advance) is handled and their wishes for the distribution of their personal property implemented through a process called probate. Probate simply means the procedure by which their last written directives are legally certified as the final statement of their wishes regarding their worldly possessions (including any property or properties they may have owned). It also confirms the appointment of a person or entity the deceased person selected to administer their estate. The term probate is also frequently used to refer to the entire process of “probating” an estate. In this usage, it refers to the entire process that gathers all available assets, pays any outstanding debts, taxes, administrative expenses and then finally makes the specified distribution of remaining assets to those persons or entities designated by the will.

The personal representative (also known as the executor or executrix) who is named in the will is legally in charge of this process and is responsible for handling the orderly method for administration of the estate as set forth by the probate laws and procedures of their state. The executor is typically held accountable for their actions and decisions by the heirs and other beneficiaries and in some cases may be formally supervised by a probate court. If a will does not exist or a personal representative is not designated in the will, the court will appoint one (assuming there is personal property to distribute).

The personal representative is often entitled by law to a reasonable fee or commission for their services.

Probate law generally encourages or provides for partial distributions of funds during the period of administration and assets are often distributed “in kind” rather than sold during this period. Tax laws generally look to the personal representative as being responsible for making death tax filings and other tax payments from the outstanding assets of the deceased. Therefore, choosing an executor/executrix/personal representative is an important decision.

The basic job of administration and accounting for assets must be done whether the estate is handled by a personal representative as part of the probate process or if probate is avoided. In the recent past, lawyers and other professionals have advocated the use of probate avoidance techniques (such as revocable trusts, etc.) in states where the probate process has been seen to be too slow and overly expensive. In recent years, many states have simplified or streamlined their probate processes and, in such states, there is now less reason to employ probate avoidance techniques.

Probate Court

A probate court, which is sometimes referred to as a surrogate court, is a specialized court and legal process that deals with matters pertaining to the probate and the administration of the estate of deceased persons.

These specialized courts ascertain and oversee that proper administration and distribution of the assets of a decedent (one who has died), determine and certify the validity of wills, enforce the provisions of a valid will (by issuing the grant of probate), prevent improper action or malfeasance by executors and administrators of estates, and provide for the equitable distribution of the assets of persons who die intestate (without a valid will). In such cases, the court may appoint a personal representative to administer the matters pertaining to an estate.

If there are disputes regarding an estate, the probate court ultimately decides who is to receive the property of a deceased person. In a case of an intestacy, the court determines who is to receive the deceased’s property under the laws it is governed by. The probate court will oversee the process of distributing the deceased’s assets to the proper beneficiaries. In some states or jurisdictions, probate courts are also referred to as orphans’ courts, superior court, courts of ordinary or other names. Not all jurisdictions have specific probate courts and, in some locales, probate matters are handled by a chancery court or another court of equity.

The probate court can be petitioned by parties that are interested in or who have claims against an estate, such as when a beneficiary feels that an estate is being mishandled or someone to whom the decedent owed money. The court has the authority to demand that an executor, executrix or personal representative give an account of their actions on behalf of an estate.

Personal Representative

The Personal Representative, also known as the Executor (if the personal representative is a male) or Executrix (if the personal representative is a female) is the person who is designated by the will of the person who has died to administer their estate and handle the distribution of its assets to those entities designated by the provisions of the will. Unless there is some valid objection or the person designated refuses to serve in that capacity, the probate judge will appoint the person who is named in the will to serve as the personal representative.

It is the duty of the personal representative to ensure that the deceased person’s wishes, as expressed in the will, are carried out. Some of the tasks that may be required to be performed by the personal representative include determining and protecting the specific assets of the estate; obtaining information (name and location) in regard to all beneficiaries named in the will and any other potential heirs; collecting and arranging for payment of the debts (if any) of the estate; approving or contesting any claims made by creditors; making sure estate taxes are calculated and paid, filing any required forms, and assisting the attorney for the estate (often selected by the personal representative if not specified in the will).

Joint Tenancy With Rights of Survivorship

Joint tenants (or tenancy) with the right of survivorship (JTWROS) is a type of ownership of real property or financial assets in which all joint owners have equal portions of ownership that are immediately re-allocated to remaining owners if one or more owners dies.

Testate

This term refers to a person who has died and left a “Last Will and Testament” that specifies their wishes pertaining to the distribution of the assets of their estate following their death. In this case, the estate will be distributed according to the provisions of the will.

Intestate

This term refers to a person who has died and did not leave a “Last Will and Testament.” In this case, the administration of the estate will be handled by the court of jurisdiction and according to the laws of the state.

Codicil

A codicil is a document, attachment or rider that is added to an existing will that modifies or supersedes existing provisions or adds new provisions. This is done as an alternative to redrawing the entire will and is often done to change a beneficiary or assign disposition of a particular property or define the rights of a specific beneficiary.

Probate Definitions And General Information

How does the probate process work?

While the process can vary from state to state and is often subject to outside factors that can certainly change it, the list below represents a VERY simplified step-by-step description of the process:

1. An original (signed and executed) copy of the will is delivered to the local probate court or whatever court supervises probates in that locale.
2. A notice of the Petition for Probate is published in a local newspaper. This is usually a requirement prior to the formal appointment and/or certification of the personal representative (executor / executrix) who was named in the will, assuming a will exists (legally referred to as “testate”), or the court-appointed administrator if there is no will (referred to as “intestate”).
3. After the certification or appointment of the personal representative has been made official, they then file their formal petition with the court to probate the estate.
4. Following that step and generally for a legally specified period of time (four months is typical) from the date of the public notification of the petition for probate, creditors against the estate are allowed to file their claims. This includes any previously unpaid debts, other liens or judgments, debts resulting from medical care, funeral expenses, outstanding taxes, and other encumbrances.
5. During this same period, the personal representative will be working to identify, gather and secure the assets of the estate in such a manner as to be able to ultimately distribute them in accordance with the will or court directives. This may include locating and accessing bank accounts, determining any remaining debts owed by the decedent, securing titles to real property, and identifying other assets that need to be disposed of.
6. The personal representative must maintain these assets safely and properly during their stewardship. They must also collect any income (rents, residuals, interest payments, etc.) that are due to the Estate. Proper insurance coverage should be maintained to protect assets from theft or damage.
7. The personal representative may liquidate some of the hard assets, such as cars, real estate, etc., to provide the cash required to compensate creditors.
8. When the formal claims period has expired and all assets have been collected, property that needed to be sold has been sold, and assuming no problems have arisen, the personal representative will file their final petition with the probate court to allow a complete distribution of all remaining assets to the heirs and beneficiaries.
9. If the court approves the petition, the personal representative distributes the assets as instructed in the will or as required by law or the courts if there was no will.

How long does probate usually take to complete?

The duration of the probate process is subject to various factors, but a general rule of thumb is approximately six months. However, the process often takes much longer. Some factors that can delay the process include:

• Problems in locating heirs and beneficiaries.
• A contest of the will (disputing the validity of the document).
• Unsettled claims or liens against the estate.
• Real estate or other property that cannot be sold for some reason.
• Failure to properly notify one or more creditors during the claims period.
• Dissatisfaction regarding the actions of the personal representative by the heirs or beneficiaries.

The complexity of these issues makes it essential that a well-organized and meticulous personal representative is selected to manage the process and reduce the chances of complications and delays.

Why is probate actually required?

There are several reasons why probate is necessary:

• To transfer the legal title/ownership of the decedent’s property and assets to the heirs and/or beneficiaries.
• To collect any taxes owed by the decedent or the estate, either at the time of death or taxes triggered by the transfer of property.
• Probate provides a legally mandated deadline for creditors to file claims against the estate, preventing future claims against the heirs or beneficiaries.
• If the deceased owned real estate, probate ensures that the title to that property is transferred to the rightful heirs or beneficiaries.
• It provides a method for the physical distribution of the remainder of the estate’s property to the heirs and beneficiaries.

Is it necessary for all of the decedent’s property to go through probate?

Not necessarily. Some property may pass to the beneficiaries without going through probate, such as:

• Property held in “joint tenancy with rights of survivorship” typically passes to the surviving co-owner(s) without probate.
• Life insurance policies or annuities with named beneficiaries.
• IRAs, Keoghs, and 401(k) accounts, which usually transfer automatically to named beneficiaries.
• Bank accounts with “payable-on-death” (POD) designations or those held in “Totten Trusts” transfer directly to beneficiaries.
• Property held in a living trust passes to the beneficiaries without probate.

How much does probate cost?

The cost of probate varies depending on state law and local practices. When all costs are added up—appraisal costs, executor’s fees, court costs, legal and accounting fees, etc.—probate can easily cost from 3% to 7% of the total estate value, and more if there is a contested will.

If there is a really small estate, is probate still necessary?

In some states, simplified probate procedures are available for small estates, typically for those valued below certain financial thresholds (which can range from a few thousand dollars to around a hundred thousand dollars). However, if there is real estate or debts involved, full probate may still be necessary, regardless of the estate's size.

What goes on in the probate of an uncontested will?

Typically, the person named as the deceased’s Personal Representative (Executor/Executrix) will hire an attorney who prepares a “Petition” for the court. This petition, along with the Will, is filed with the probate court. Notification is sent to all individuals who would have legally been entitled to receive property had there been no Will, as well as to the named beneficiaries.

If there are no objections, the court approves the petition, appoints the Personal Representative, and requires that taxes and creditors be paid. The Personal Representative will be required to file regular reports to the court to ensure that the property is properly accounted for and distributed according to the Will’s terms.

Where is probate handled?

The probate process is handled by the appropriate court in the state and county where the decedent resided at the time of death. The court handling probate may have different names depending on the jurisdiction. For example, in New York, it is called the Surrogate’s Court, while in California, it is known as the Superior Court, Probate Division.

Can I handle probate without a lawyer?

While it is not legally required to use a lawyer for probate, it is highly recommended. Probate is a formal process, and minor errors, omissions, or missed deadlines can cause significant delays or expose the estate to liability. Emotional conflicts among family members can also complicate the process, making the use of an attorney advisable to navigate these challenges.

What are the main duties of a personal representative?

• Determine if there are any probate assets.
• Identify, gather, and inventory the assets of the deceased.
• Receive payments due the estate, including interest, dividends, and other income (e.g., unpaid salary, vacation pay, and other company benefits).
• Set up a checking account for the estate.
• Figure out who is going to get what and how much under the Will (if there is no Will, the state’s “intestate succession laws” apply).
• Value or appraise the estate’s assets.
• Give legal notice to potential creditors (the procedure and deadlines for creditors to file claims vary from state-to-state).
• Investigate the validity of all claims against the estate.
• Pay funeral bills, outstanding debts, and valid claims.
• Pay the expenses of administering the estate.
• Handle various paperwork, such as discontinuing utilities and charge cards, and notifying Social Security, Civil Service, and Veterans Administration of the death.
• File and pay income and estate taxes.
• Distribute the remaining property in accordance with the instructions provided in the deceased’s Will.
• Close probate.

If I am named as the personal representative, do I have to accept the job?

No. It is always your option to serve or decline. Even if you agree to serve, you can resign later. If you do quit before the completion of probate, you may be required to provide an “accounting” for the period you served. If you decline to serve (or accept and resign later), any alternate named in the will is typically appointed by the court. If no alternate representative is named in the will or the named alternate dies or is unwilling to serve (or, of course, if a person dies without a will), the probate court will appoint someone to serve as the personal representative.

Are personal representatives usually paid for their work?

It is not a requirement, but usually, they are compensated. Certainly, all personal expenses they incur in the management and process of settling the estate must be paid for. Typically, a personal representative earns a fee of +/- 2% of the total value of the estate for their work. This can be mandated by the courts or by law in some states and varies moderately from state to state. Generally, this percentage diminishes as a percentage as the size of the estate increases.

All funds paid to the personal representative are subject to approval by the probate court. Additional fees may be allowed by the court in cases of unusual difficulty or extraordinary circumstances. On the other hand, if a personal representative does not perform their duties in an orderly or timely manner, the court may reduce or deny compensation and the Personal Representative may be held responsible for any damages caused.

What happens if the personal representative fails to perform his or her duty?

An executor or administrator who is derelict in his or her duty is personally liable for damages caused in the administration of the estate.

Liability may arise from improperly managing the assets of the estate, failing to collect claims and sums of money due to the estate, overpaying claimants, selling an asset without the authority to do so, or at an inappropriate price, neglecting to file tax returns on time, distributing property to the wrong beneficiaries, etc.

This means that the Personal Representative might wind up paying for the loss out of his or her own pocket.

What if someone objects to or contests the will?

If someone files an objection to the Will or produces another Will, what is known as a “Will contest” has begun. While Will contests are not that rare, and while few people actually win one, they can be extraordinarily costly and create incredible delays.

It’s also important to know that the requirements for contesting a will require a person to have “standing” to mount a contest. Even though you feel your next-door neighbor’s children ignored her and treated her badly, that does not give you the right to contest her will. If a person has proper standing to contest a will (ex: a child who was cut out of the will by an angry parent, or even by a kindly parent who felt that the local charity, not his children, should get his assets) that person would have standing to bring a “will contest”.

What is the basis for a will contest?

Most of the challenges to invalidate Wills are by potential heirs or beneficiaries who got little or nothing. Questions on the validity of a Will must be filed in probate court within a certain number of days after receiving notice of the death or petition to admit the Will to probate.

The typical objections and unhappiness is not one of them are:

• The Will was not properly drawn, signed, or witnessed, according to the state’s formal requirements;
• The decedent lacked mental capacity at the time the Will was executed;
• There was fraud, force, or undue influence;
• The Will was a forgery.

If the Will is held invalid, the probate court may invalidate all provisions or only the challenged portion. If the entire Will is held invalid, generally the proceeds are distributed under the laws of intestacy of the probating state.

What if there is no will?

If a person dies without a Will (known as dying “intestate”), the probate court appoints a Personal Representative frequently called an “Administrator” to receive all claims against the estate, pay creditors, and then distribute all remaining property in accordance with the laws of the state.

The major difference between dying testate and dying intestate is that without a valid Will an intestate estate is distributed to beneficiaries in accordance with the distribution plan established by state law; a testate estate is distributed in accordance with the instructions provided by the decedent in his/her Will.

Probate and Estate Information

Will and Estate Information