Simply stated, probate is a public court proceeding in which a court of law supervises the orderly and proper distribution of a decedent’s assets in accordance with the instructions left in the decedent’s will, or, when there is no will, the court imposes the applicable state’s “succession” or intestacy statutes. These so-called “succession” statutes provide for the passage of a decedent’s property and assets to the decedent’s heirs according to the heirs’ relationship to the decedent.
Probate involves several steps:
It depends. Some probate expenses include court filing fees, accounting fees, administrative fees, executor/administrator fees and legal fees. The amount of each depends on the size of the estate, the kind of assets owned by the decedent, whether any beneficiaries or heirs contest the proceeding, etc.
Generally, fees for an executor/administrator are typically 2% of the entire probate estate. If the executor/administrator hires an attorney, probate legal fees are generally equal to a percentage of the overall size of the probate estate – usually about 2%-5%. In some circumstances, depending on the size of the estate, probate legal fees may be paid on an hourly basis. These fees are generally negotiated between the executor/administrator and the attorney.
Upon the death of a decedent, the decedent’s heirs should observe the following procedures. First, they should locate the decedent’s will or other estate planning documents. Second, if they find a will, they should identify and contact the named executor in the will. Third, they should hire an experienced probate attorney who can initiate court proceedings as soon as possible to protect and secure the decedent’s assets. One necessary action is to file the original will with the appropriate state or local government agency within a specified number of days after the decedent’s death. In Nevada, for example, one has thirty (30) days to file the original will with the county clerk of the county in which the decedent dies.
If the decedent’s heirs discover that the decedent has died “intestate,” or without a will, they should nominate an administrator to oversee the distribution of the decedent’s assets. Once they have chosen an administrator, the heirs, with the assistance of their attorney, must get the court’s approval as to their choice. In Nevada, by statute, if a person dies intestate the personal representative/administrator must be a Nevada resident. In most instances, the administrator can be a bank trust department, public administrator, friend, relative or attorney. If the decedent’s heirs neglect to choose an administrator, the court will appoint one for them.
One duty of the executor/administrator, with the assistance of an attorney, is to ascertain which assets are subject to probate. Many assets owned by the decedent may actually not be subject to probate.
Only in very rare circumstances. When a person dies without a will or other estate planning documents, they die “intestate,” which means that the person’s property will be distributed according to the applicable state’s “succession” statutes. These so-called “succession” statutes provide for the passage of a decedent’s property and assets to the decedent’s heirs according to the heirs’ relationship to the decedent.
In Nevada, only where the decedent leaves no surviving spouse, no lineal descendants (children, grandchildren, etc.), no father, no mother, no siblings, no nieces or nephews, or kindred of any kind will the decedent’s property and assets escheat to the state for educational purposes. See NRS 134.070.
Probate is the legal process by which assets that are owned in a person’s individual name at their death are transferred to their heirs or beneficiaries, typically in the manner prescribed by the decedent’s will.
A probate is necessary any time a person passes away owning property in their individual name that does not have a mechanism already in place for transfer (such as Rights of Survivorship, Pay on Death (POD) or Transfer on Death (TOD) designations). A will does not automatically transfer legal title of assets to beneficiaries, it merely directs a court as to who should receive the decedent’s property. A court order makes the transfer of a decedent’s property to a beneficiary legally binding.
If a person dies with no property held in their name (e.g., has a living trust which owns all their property), no probate proceeding is necessary.
How long a probate takes depends on a number of factors, including:
Depending on where a decedent lived and the size of the decedent’s estate, some estates may be settled without a formal probate procedure or administration. As of 2015, the following guidelines indicate what type of probate administration is necessary in Nevada for any size estate:
Thus, a probate can take a day, or it can take months or years if the estate has a high value or beneficiaries and heirs fight over who gets what.
If a person dies with any property held in their individual name with no method in place for transferring such property upon their death, a probate proceeding is required to transfer legal title to heirs and beneficiaries.
Depending on the amount of property in a decedent’s estate, some estates may be settled without a formal probate procedure or administration. As of 2015, the following guidelines indicate what type of probate administration is necessary in Nevada for any size estate:
Usually, no. A probate may be opened at any time. If a person has passed away owning property and has not provided for its transfer otherwise, a probate proceeding will eventually need to be opened to properly transfer the property to the rightful heirs and beneficiaries. However, there are potential risks for failing to open an estate in a timely manner, such as the loss of important financial and asset information or the misplacement of the decedent’s property.
A person who dies without a will or other estate planning documents dies “intestate,” meaning that person’s property will be distributed according to the applicable state’s “succession” statutes. These so-called “succession” statutes provide for the passage of a decedent’s property and assets to the decedent’s heirs according to the heir’s relationship to the decedent. In effect, a person who dies “intestate” necessarily accepts these statutes as his or her estate plan by default. Additionally, if a person dies without a will they are not able to appoint the personal representative or administrator they want to administer their estate, it is left up to the remaining heirs and court to decide.
In theory, “succession” statutes are designed to correspond with how most people would likely distribute their property and assets whether or not they draft a formal will. No one, however, should rely on the intestate statutes of their state. In almost every case, the person will be better served to design his or her own plan and not rely on state statute. Often, these statues do not adequately conform to how a particular person would want his or her property and assets distributed after death. In addition, not having a well-drafted will can delay the administration of the estate. Therefore most, if not all, people will be better off by providing for the distribution of their assets according to a formal will rather than by relying on their state’s “succession” statutes.
In Nevada, for example, if a person dies without a will or other estate planning documents, the probate court will distribute the decedent’s separate property as follows:
See NRS 134.010-134.120
All probates are governed by individual state laws. In addition, probate proceedings are required within each state that property or assets are located. Therefore, even if you are resident of Nevada and you hold property or assets in your name in another state, those assets would be subject to that particular state’s probate laws.
One way to avoid having to open multiple probate proceedings if you do own property in multiple states is to put those properties in an LLC or living trust.
Probate is the court supervised process of transferring legal title from a decedent to his or her heirs and beneficiaries. Thus, any time someone passes away with property titled in his or her individual name with no provision for transferring title upon their death in place (such as a beneficiary designation, transfer on death or pay on death designation, or they owned property with a right of survivorship), that person’s estate must go through probate.
To avoid probate, one must either provide for the transfer of their assets on their death contractually (via the methods listed above) or pass away with no property held in their name. Not all assets can be passed contractually (e.g. tangible personal property), however, it is possible to transfer title to all a person’s property from their name before they pass away and still retain full control and management of it.
A living trust avoids probate when title to a person’s various assets are transferred to the name of the trust during life. On that person’s death, the trust remains ‘alive’ – the property and the instructions that accompany it are immediately available for the benefit of their loved ones, without the intervention of the probate process. Although a trust administration is often necessary, if the trust is fully funded (which means the trust owns all the person’s assets) all of the decedent’s property and the trust provisions remain private.
Many people choose to settle their estates by drafting a formal will. A properly drafted and executed will allows an individual to more effectively control the transfer of his or her property to desired family, friends or organizations that are specifically identified in the will document. In general, a will must comply with two (2) basic requirements to ensure its validity: the person executing must be 1) eighteen (18) years of age or older, and 2) of “sound mind.” If the will is typewritten, it must be witnessed by at least two (2) disinterested witnesses. If the will is handwritten, its material provisions must be entirely in the handwriting of the creator, dated and signed. Unlike a formal will, it does not need to be witnessed by another person. Typically, handwritten wills are referred to as “holographic” wills.
Though not necessarily the most effective estate planning tool, a will does provide several benefits. First, a will allows you to designate who will receive your property and what conditions they must meet to receive it. Second, a will allows you to appoint your own executor. Third, a properly drafted will may simplify the probate process and more efficiently dispose of your assets. Fourth, you may amend or revoke your will at any time after executing it. Finally, you can create a trust within the will document itself for whomever you choose, like your spouse or minor children (this is called a “testamentary trust”).
Despite these benefits, however, generally a will does not allow you to avoid two (2) potentially costly and time-consuming hurdles in settling the affairs of your estate. First, in the case of an estate with significant assets, a will does not avoid the probate process. Generally, your estate must be probated whether you die testate (with a will) or intestate (without a will). Second, a will does not allow you to avoid a “will contest” in which family, friends or other organizations quarrel over the terms of your will in the event your will is not properly written and/or executed. Therefore, in almost every case, you should choose to use a trust or some other type of estate plan.
It is also important to note that about the only aspect of your estate that your will actually controls is property owned solely in your name or in your name with another person as “Tenants in Common”. For most people, this is a relatively small portion of the estate. The list of what wills do not control usually includes the bulk of an estate’s value, including:
Life insurance, annuity proceeds, POD and TOD accounts and retirement benefits are not controlled by wills. They are controlled by beneficiary designations.
Your will also cannot take care of you if you are incapacitated. It only takes care of the people that you leave behind. Your will can do absolutely nothing to help you or your loved ones while you are mentally incompetent, because it is only effective at your death.
If you die leaving minor children or grandchildren and your will leaves your property directly to them, you have really left your financial affairs and the well-being of your children and/or grandchildren in control of the probate court. Those minor children are entitled to their inheritance at 18, which may have disastrous results. Also, in leaving property outright to anyone, regardless of their age, you have not protected them from: