Almost everyone has heard the term, but not many are familiar with what it means. For many people, the only thing they feel that they know for sure about probate is that it should be avoided if possible. So, what exactly is probate?
Probate is the court supervised process of administering a decedent’s estate. In brief, the purpose of probate is to appoint someone to handle the decedent’s affairs, ensure that the decedent’s final expenses and debts get paid, and transfer the assets comprising the decedent’s “probate estate” to those individuals or institutions entitled to receive them.
A decedent’s “probate estate” generally includes all property owned by the decedent except assets: (a) owned jointly with another person; (b) properly titled to or held by a trust; or (c) that pass directly to an intended recipient by operation of a beneficiary designation, transfer on death designation or “payable on death designation.”
The steps, time and expenses involved in a given probate proceeding will depend on a number of factors, including the decedent’s county of residence, the size of the estate, whether the decedent left a valid Will. However, the probate process usually begins by filing the decedent’s Will (if there is one) and other required paperwork with the probate court in the county in which the decedent lived.
Once the court receives all of the paperwork and documentation needed to begin the probate, the court must appoint a personal representative of the estate (sometimes referred to as an “executor”). Typically, the court will appoint the person nominated in the decedent’s Will. If there is no Will or the nominated personal representative cannot or will not serve, someone else (often a family member or an attorney) must be appointed. The person who will serve as personal representative may be required to attend a court hearing.
The person ultimately appointed to serve as personal representative is responsible for:
(1) Notifying the decedent’s family, beneficiaries, and creditors;
(2) Identifying, collecting, and filing with the court an inventory of all property comprising the probate estate;
(3) Resolving any claims against the estate;
(4) Filing the decedent’s final individual income tax returns, the fiduciary income tax returns for the estate, and the estate tax return (if necessary);
(5) Distributing the probate assets to the individual(s) or institution(s) named in the Will as beneficiaries of the estate, or if there is no Will, according to Wisconsin’s laws of intestate succession;
(6) Preparing and providing the court with a detailed account of all assets and income received by the estate, all debts, claims, and taxes paid by the estate, and all assets distributed from the estate.
When the personal representative completes these and any other required tasks, the probate proceeding terminates. This usually takes between eight and eighteen months from the date the probate began. However, extremely complex or contested probates can last much longer.
The amount of time required to probate an estate is one of the factors that contribute to the belief that the process should be avoided if possible; the costs associated with probate are another such factor. Examples of the types costs typically involved with probate are: (a) court fees; (b) attorney and/or tax preparer fees; and (c) expenses associated with maintaining or selling estate assets (for example, the decedent’s home) during the course of the probate process.
For these and other reasons, it is often desirable to take advantage of estate planning techniques (e.g., creating and funding a revocable living trust) that allow one’s estate to pass outside of probate. Please keep in mind, however, that the estate planning process presents complicated and individualized issues about which you should consult your legal and tax advisors to ensure that your plan is appropriate for your circumstances. This probate summary is not intended to replace or offer legal advice applicable to your situation and should be used for informational purposes only.
Attorney Stephen A. Lasky