THE MURPHREE LAW FIRM
W . F A Y E M U R P H R E E & D . B R E N T M U R P H R E E
PROBATE
What is Probate?
Probate is a court-supervised proceeding that authenticates your Will (if you have one) and approves your named Executor so he or she can distribute your property and belongings. During the probate process, all your assets must be located and assessed for total value. Once that is done, taxes and debts are paid and the remaining value of the estate is distributed.
In cases where there is no Will, this process obviously becomes more complicated. Because there is no documentation stating your final wishes, it is up to the courts to handle proceedings and make all decisions for you.
When is Probate Necessary?
Unless you properly plan, your estate will go through the probate process. That said, the process is greatly simplified, or potentially even totally avoided, when you have a solid Estate Plan in place. The more planning you do now, the easier it will be on your loved ones after you pass.
What Has to go Through Probate Court?
If you do not have a Will, everything you own will go through probate court. The following will always go through the process, regardless of what your Estate Planning states.
- Any inheritance where the Beneficiary predeceases the giver: If a named-beneficiary passes away before you do and you fail to update your Will, the courts will become involved in deciding how to settle this part of your estate.
- Non-titled property: Non-titled property is anything you own that doesn’t have paperwork. Household items such as appliances, clothing, furniture and other general items could fall into this category. If your Will names these items and appropriately states your wishes, you can eliminate probate.
- Partner-owned investment property: In cases where properties are titled as “tenants in common,” and where clear instructions aren’t present in a Will, a probate court will step in to help determine how your share is passed down. Keep in mind, if your Will makes your wishes clearly known, the process becomes simplified.
- Sole ownership property: Property that’s titled in solely in your name will go through probate to determine ownership. In some states, you can avoid this by adding “POD” (payable on death) or “TOD” (transfer on death) to the title or deed.
What Does Not Have to Go Through Probate Court?
Certain assets and property will not go through probate. By properly planning, you can help avoid probate for any of the following.
- Items that have a Beneficiary named: Naming a Beneficiary on an asset means you can avoid probate. For example, life insurance policies have named Beneficiaries, so proceeds go directly to them without having to go through probate.
- Items placed inside a Living Trust: Because a Trust owns the items inside it, when you pass away, anything in your Trust can go to your Beneficiaries as specified by the Trust, thus avoiding the probate process.
- POD (payable on death) or TOD (transfer on death) items: When you title property and assets such as bank accounts, real estate, retirement accounts, stocks and vehicles with “POD” and “TOD,” you can bypass probate and pay or transfer items directly to your noted Beneficiary. Note that some states do not allow real estate to be titled this way.
- Jointly titled property (with Survivor’s Rights): Property titled jointly with Survivor’s Rights will automatically go to a Survivor after you pass. There is no need for the property to go through probate in this case.
What is the Probate Process?
How the process of probate plays out in court largely depends on whether or not you have a Will. The biggest difference is that when no Will is present, the court will appoint someone as a Personal Representative to oversee distribution of your belongings. In the absence of a Will, only the beginning of the probate process will differ. Once a Personal Representative is appointed, the rest of the process will be the same.
Death Certificate
Someone, usually your Executor or lawyer, will inform the court of your death and submit a copy of the death certificate to start the probate process.
Have the Will Validated
Your Will must be authenticated by the court to ensure it was properly signed and dated in accordance with the law. Once this is done, your Will is considered valid.
Select Someone to Conduct Probate
In cases where a Will is present, a judge formally appoints the person you name as Executor (only in very rare cases would the court overturn your choice). The Executor then oversees the process and settles your estate. If there is no Will, the court will appoint a Personal Representative for this role. Usually this would be your next of kin. A Personal Representative acts exactly as an Executor would.
Inform Beneficiaries & Creditors
This is likely the biggest task most Executors or Personal Representatives will undertake. It involves finding and informing any potential Beneficiaries and possible creditors of your passing. He or she will also need to communicate with creditors to settle your debts using money from your estate.
Keep in mind that in cases where there is a Will, most, if not all, Beneficiaries will be named, so informing them is usually an easier task. Finding creditors can be more difficult and time-consuming, regardless of whether or not a Will is present. It should make sense that both parts of this process become exponentially more difficult when there is no Will.
Determine Value of Assets/Property
To determine the value of an estate, an assessment must first be completed. This will account for everything you own at the time of your passing. Sometimes, particularly in larger estates, a professional appraiser may be needed. This person understands the process of collecting and inventorying all real estate, personal and household items to assess their value. The total combined value is then used to estimate the value of your estate.
Pay All Fees and Debts of the Deceased
Funeral expenses are typically paid from your estate. Once this is paid, the estate will fund the payments for medical expenses, filing and paying taxes and handling other unpaid debts you may owe at the time of your death. This step needs careful attention, because there is potential for debtors to go after Beneficiaries in the future to recoup any unpaid debts.
Distribute Remaining Assets
After all the debts have been paid, any remaining assets will be forwarded to the appropriate Beneficiaries. The Executor or Personal Representative will transfer deeds and titles into the correct Beneficiary’s name, per the direction of the Will or the court.
*All information can be found on texaslawhelp.org.
