Frequently Asked Questions
Maybe you have a few questions. That’s okay; most people do. So here’s a quick collection of some of the questions people ask us… along with our answers. If you still have a question, don’t hesitate to contact us (or give us a call) and we’ll be happy to answer it for you.
Probate General Information
Q: Why is probate actually required?
A: There are many reasons for probate, but some of the most important are:
- Transferring the legal title/ownership of the decedent’s property and assets to the heirs and/or beneficiaries. generally, if there is no property to transfer, there is usually no need for probate.
- The collection of any taxes due to various taxing authorities that may be owed by the decedent or his/her estate at the time of death or taxes that become due when a property is transferred.
- As stated above, probate also provides a legally mandated deadline for creditors to file claims against the estate. This prevents old or unpaid creditors from future claims against the heirs or beneficiaries.
- If the deceased owned real estate in his own name, no one could properly accept title to that property nor would a bank give a mortgage to a new buyer mortgage unless the estate went through probate and a “clear title” could be given the new buyer.
- Generally, no one would enter into any other transactions involving the deceased’s property until the will has been filed for probate and someone has been legally appointed to act for the estate.
- Finally, it provides a legal method for the actual physical distribution of the remainder of the estate’s property to the heirs and beneficiaries.
Q: Is it necessary for all of the decedent’s property to go through probate?
A: Not necessarily, however, some legal method must be employed to transfer the legal title and ownership of the deceased’s property into the name of the beneficiaries and/or heirs.
Usually, real and personal property owned under a structure called “joint tenancy with rights of survivorship” passes to the surviving co-owner(s) without a requirement for probate.
Other types of benefits, such as a life insurance policy or an annuity that is payable directly to a named beneficiary can often be tendered without the requirement for probate. Also, IRAs, Keoghs, and 401(k) accounts usually transfer to the persons named therein as heirs or beneficiaries automatically without probate. Bank accounts that are set up as “payable-on-death” accounts; ones that are being “held in trust for” specific heirs or beneficiaries (also called a “Totten Trust”) also pass the proceeds directly to the named heirs or beneficiaries without probate.
A “living trust” that holds title to a property held in trust also passes that property to the heirs or beneficiaries without probate. Such a trust is a legal entity which survives after the death of the person who created it.
Q: Where is Probate handled?
A: The appropriate court in the State and County where the deceased permanently resided at the time of his or her death is usually the court where the probate is processed. A court that handles issues such as these can often be referred to my several different names. For example, in the state of New York, the court that handles probate is called the Surrogate’s Court, while, in the state of California, it is called Superior Court, Probate Division. However, it’s most common for it to be referred to simply as “probate court”.
Q: Can I handle probate without a lawyer?
A: While there is usually no legal requirement to use a probate lawyer, probate is a rather formalistic procedure. One minor omission, one failure to send Great Aunt Maggie a copy of the petition, or a missed deadline, can cause everything to come to a grinding halt or expose everyone to liability.
The death of a family member or friend sometimes tends to bring out the very worst in some people. Experience shows that even in close families there is a tendency to get overly emotional about relatively trivial matters at the time of a loved one’s death, such as who gets the iron frying pan and who gets the kettle. Such minor matters or any delays or inconveniences can be upsetting, pose issues of fairness, and create unfounded suspicion among family members. Thus, it generally is a very good idea to “let a lawyer do it”.
Definition and Duties of the Personal Representative / Executor / Executrix
Q: What happens when the person who dies owned land in multiple states?
A: Usually, the laws of the state in which the deceased was last a permanent resident prevail regarding governance of probate issues – covering all of the deceased’s personal property, wherever it was located, and all the deceased’s real property located within the state. Therefore, probate almost always filed in the last state where the deceased person lived.
If the decedent owned out-of-state real property, the laws of the other state can govern (or certainly affect) who inherits it if there is no will. If a will exists and it has been filed for probate in the state of most recent residence of the deceased, it usually must be submitted to probate in the other state(s) of jurisdiction in which the deceased owned real property. That additional probate filing is formally referred to as “ancillary probate”. Some states require the appointment of a personal representative who is a local resident or the state to administer any in-state property.
If there is no Will, probate is usually required in each state where the real property is situated, in addition to the home state and each individual state can impose it own methodology that controls the distribution of assets. As an example, in one state, the real estate might go only to the spouse. In another state, it might be equally divided between a spouse and each of his or her children. In still another, half of the assets might go to a spouse and the remainder divided equally between the children. This is one of the reasons a will is so important to properly express the wishes of the deceased and prevent family struggles and quarrels following a death.
Q: Who is legally responsible for handling the probate process?
A: If there is a will, the Personal Representative (sometimes referred to as the “executor” or “executrix”) is usually responsible. If there is no will, an “administrator” is appointed by the court as part of the probate proceeding and that person has the responsibility for managing the estate through the proceeding, subject to established probate rules and procedures.
In many states, the probate court has a considerable amount of control over the activities of the Personal Representative and requires that she or he obtain prior permission of the court before certain actions, such as the sale of real estate or business interests owned by the estate, may take place.
Q: What are the main duties of a personal representative?
(1) determine if there are any probate assets;
(2) identify, gather, and inventory the assets of the deceased;
(3) receive payments due the estate, including interest, dividends, and other income (e.g., unpaid salary, vacation pay, and other company benefits);
(4) set up a checking account for the estate;
(5) figure out who is going to get what and how much under the Will (if there is no Will, the state’s “interstate succession laws” apply);
(6) value or appraise the estate’s assets;
(7) give legal notice to potential creditors (the procedure and deadlines for creditors to file claims vary from state-to-state);
(8) investigate the validity of all claims against the estate;
(9) pay funeral bills, outstanding debts, and valid claims;
(10) pay the expenses of administrating the estate;
(11) handle various paperwork, such as discontinuing utilities and charge cards, and notifying Social Security, Civil Service, and Veterans Administration of the death;
(12) file and pay income and estate taxes;
(13) distribute the remaining property in accordance with the instructions provided in the deceased’s Will; and
(14) close probate.
Q: If I am named as the personal representative, do I have to accept the job?
A: 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.
Q: Are personal representatives usually paid for their work?
A: 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.
If a person is both the sole beneficiary of the estate, and the estate is not subject to Federal Estate Tax, it usually does not make sense to take any fees as all fee income is subject to income tax. (The money a beneficiary receives from the estate is income tax-free.)
Q: What happens if the personal representative fails to perform his or her duty?
A: 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.
Q: What if someone objects to or contests the will?
A: 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”. If a will gives one sibling 2/3rds of a parent’s estate and the other 1/3rd, the one receiving less has standing to bring a will contest. Similarly, if a later will is less favorable to someone than an earlier will, or no will at all, that person has standing. A will contest sometimes is launched to have a different person, bank or trust company serve as Personal Representative for the estate, or as a trustee of Trusts created by the will.
Q: What is the basis for a will contest?
A: 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:
(1) the Will was not properly drawn, signed or witnessed, according to the state’s formal requirements;
(2) the decedent lacked mental capacity at the time the Will was executed;
(3) there was fraud, force or undue influence; or
(4) 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.
If there is even the possibility of a will contest, an experienced probate lawyer is a must.
Q: How can a will be “contested”?
A: A “contest” is usually mounted by the filing of the necessary documents with the probate court by an heir, prospective heir or another beneficiary. Each state has different time limits that control the window for filing. To successfully challenge a will, there must be sufficient evidence that the will was not created properly. Sour grapes or being upset that a person didn’t receive what they felt they had coming are not sufficient grounds for contesting a will. Typically, only certain factors are mandated by law to be contestable. These might encompass the incapacity or incompetence of the decedent at the time the will was prepared, fraudulent intent on the part of some parties to the will or undue influence or duress perpetrated on the decedent.
Q: What if there is no will?
A: 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.
Q: What happens if a will cannot be found?
A: Missing Wills raises all sorts of interesting legal issues which often turn on the specific facts and circumstances, and the law of the state in which the deceased resided.
The Will may be missing because the deceased intentionally revoked it, in which case, depending on state law, an earlier Will or the state’s rules on intestate succession would determine who gets the deceased’s estate.
Alternatively, the Will may be missing because it can be proven the Will was stored in a bank vault that was destroyed in an explosion and fire. In that case, the probate court may accept a photocopy of the Will (or the lawyer’s draft or computer file), together with evidence that the deceased duly signed the original.
Q: How can I find out if there was a will?
A: The first place to check is with the probate court in the County of the State where the deceased lived. In almost every case the Will, if filed, will be available to the public.
Anyone can get to see it, and for a modest fee, obtain a copy. If you are far away, a local lawyer or legal service bureau often can arrange to do a search and get a copy for you, at a relatively modest fee.
The fact that a person died — even if he or she “owned” substantial assets — does not mean that he or she had a will, or that the will was duly filed with the Court. In fact, if the deceased held property exclusively through a Living Trust or a joint ownership arrangement, there may not have been a need to file a will, because the Trust did not “die” with the individual. Also, with certain forms of joint ownership, the property usually passes to the other joint owners automatically.
Q: How are creditors against the estate handled?
A: Creditors are notified of the death as part of the probate process. This notification process can vary from state-to-state and can range from a letter to each creditor to a blanket notice to all creditors published in the local newspaper. Once this filing or notification has occurred, creditors have a fixed period of time (defined by the court of jurisdiction) to to file any claims against the estate either by notifying the personal representative or, in some states, notifying the probate court. If the claim is approved by the personal representative, the bill is usually paid out of the estate. However, if the personal representative rejects a claim, the creditor must sue the estate for payment.
If the estate does not have sufficient funds to pay the lawful debts to the creditors, the determination of who receives payment and in what order is usually a matter of law. Also, the personal representative may be required to sell some or all of the decedent’s property to satisfy the claims of the creditors.
Q: Do beneficiaries have to pay creditors out of their own pocket if the estate is insolvent?
A: Generally not. Just as you “can’t take it with you” you just can’t make others responsible for your general debts, at least without their consent. (Otherwise a person could run up lots of debts, name his worst enemy as his beneficiary, and saddle his enemy with those debts at his or her death.)
Unless the deceased had gifted away his or her assets to someone shortly before dying, or otherwise acted in concert with them to defraud his or her creditors, beneficiaries should not have any liability to the deceased’s creditors just because they are beneficiaries. Of course, the Estate may not have anything left for them, but the beneficiaries would not be in the hole.
Of course, if the children or beneficiaries took any property or benefits from the deceased or the estate or had assumed liability for care given the deceased, or guaranteed payment, they could be held liable for some or all of the deceased’s debts separately, not because they are relatives or beneficiaries.
Q: How are taxes handled in probate?
A: For federal and state tax purposes, death triggers two events:
(1) It ends the decedent’s last tax year for purposes of filing an income tax return, and,
(2) It establishes a new, separate entity for tax purposes, the “estate.”
For Federal tax purposes, it may be necessary to complete and file one or more of the following, depending on the decedent’s income, the size of the estate, and the income of the estate:
(1) Final Form 1040 Federal Income Tax return.
(2) Form 1041 Federal Fiduciary Income Tax returns for the estate.
(3) Form 709 Federal Gift Tax return(s).
(4) Form 706 Federal Estate Tax return.
For state purposes, an executor must file the appropriate state income tax return (assuming the decedent was required to do so while living) and any state income tax returns during the probate period, plus possible estate tax, inheritance tax and gift tax returns. (In many states, gift, estate, and inheritance taxes have been eliminated for most small and medium-sized estates.) The requirements for filing and payment vary widely from state-to-state.
Other taxes require the attention of the personal representative in the probate process, such as local real estate and personal property taxes, business taxes, and any special state taxes.
The Personal Representative should also be alert to the possibility of issues arising from tax years prior to the decedent’s death.
Q: After a will is created, can it be modified?
A: Of course. The only real requirement is that the person making the will be competent to make the change. In the movies, you have probably heard this stated as “being of sound mind”. A will can be modified with an addendum, often referred to as a codicil or replaced by a completely new will. Sometimes the law can modify the effect of a will. This is especially common in cases of divorce which usually terminates an ex-spouse’s rights unless a specific provision keeps them in place. However, separation doesn’t terminate a spouse’s rights. This just one example, but a probate attorney should always be up to date on prevailing legal issues in your state.
Q: Can there be more than one designated personal representative?
A: You could do so by appointing co-representatives or a secondary representative. However, this could not only cause problems during probate if there is a disagreement between the representatives. Normally, one representative is all that is needed and appointing more than one should only be done where there is a specify reason to do so. A possible example might be where one person handled only the real estate aspects of probate and the other one was designated to handle all other issues. Appointing co-representatives just to protect someone’s “feelings” is almost always a bad decision and should be avoided. Often, a frank discussion with the people involved can eliminate any issues of concern and allow one person to take on the challenging role of representative without the added challenges of co-representation.
Q: Is it necessary for the personal representative to live in the decedent’s state?
A: It depends on the laws of the state, but usually isn’t an absolute requirement, but it is usually easier – especially regarding larger estates and real estate.
Q: How does “joint tenancy” affect a will?
A: Joint tenancy with right of survivorship (JTWROS) is a common legal method of defining property ownership when shared with another person, but it doesn’t replace a will. Typical, this “survivor” is a spouse, but can apply to other relationships. If one of the owners dies, the other becomes the sole owner of the property. This means that the real estate isn’t part of the decedent’s estate, and therefore, is not subject to probate. However, all parties should be aware of possible tax liability implications (if any) of such survivorship.
Q: When should I make a will?
A: The simple answer is immediately. Usually, death comes as a surprise to us all and no one is aware of their impending demise. Making a will represents doing the “right thing” today for those you love, and you should occasionally review your will to make sure it continues to represent your final wishes. If not – modify it. Also, almost everyone who dies owns some sort of personal property, therefore, everyone needs to provide their heirs with a will to prevent confusion or strife after their death. While state law will decide what happens to property in the estate of a person who dies intestate, the default plan normally distributes property to relatives. Therefore, a girlfriend, boyfriend, partner or fiancé will have no provision made for them by law unless provided by a valid will.
Q: Who can or should draft my will?
A: If you do not do it yourself (which is perfectly acceptable) only an attorney can legally draft a will for you. Be aware that personally drafted wills are often incomplete and therefore some or all of such will can be held to be invalid under state laws. While there are certainly kits available from multiple resources for creating a will, they are often not state-specific. If your will fails to follow state law in creation areas, it could be held to be invalid.
Q: How do you determine the price to offer on my house?
A: Great question, and we’re an open book: Our process is very straightforward. We look at the location of the property, what repairs are needed, the current condition of the property, and values of comparable houses sold in the area recently. As you know, house values have taken a huge hit in the last 5 years and most areas still haven’t seen prices come back up. We take many pieces of information into consideration… and come up with a fair price that works for us and works for you too.
Q: Is there any obligation when I submit my info?
A: There is absolutely zero obligation for you. Once you tell us a bit about your property, we’ll take a look at things, maybe set up a call with you to find out a bit more, and make you an all-cash offer that’s fair for you and fair for us. From there, it’s 100% your decision on whether or not you’d like to sell your house to us… and we won’t hassle you, won’t harass you… it’s 100% your decision and we’ll let you decide what’s right for you.