What is probate?
After your death, your family or estate may be required to go through the probate procedure. It is a legal process in which the court distributes your property to your heirs.
The procedures will be more straightforward if you have a will or a living trust that clearly states your wishes. These documents prove to be helpful when naming your beneficiaries and the executor. The executor is the person given the power to oversee your final wishes.
What is the purpose of probate?
The purpose of probate is to transfer someone’s property after their demise legally. It may sound like an easy process, but it involves gathering all of the deceased assets and paying off any unsettled debts, which may take longer than expected.
But probate isn’t always compulsory, which means you can avoid all these, but speaking with an attorney beforehand is recommended to help you determine whether it’s necessary.
When is probate required?
Probate is required in most aspects of estate administration. It is generally necessary for the following circumstances:
- For distributing estate and assets to the beneficiaries if it was solely owned by the deceased.
- If there is any dispute over the estate, and there are legal proceedings
- If the amount of money in financial services is above the probate threshold. This could be around $5000 and $50,000.
- If the person owned stocks or shares in their sole name
Do I Have to Probate?
Not every property/estate has to go through probate. There is no requirement that property or estate must go through probate, but if the deceased owned an estate that isn’t arranged to avoid probate, there is no way the heirs will obtain legal ownership of the properties.
What happens if I don’t do probate?
If you don’t apply for probate when needed, the deceased properties can’t be accessed or distributed to beneficiaries. Probate gives a named person the power and authority to deal with the deceased assets. Without this power, they can’t do anything with the assets.
Is probate required if there is a will?
Simply because you have a will doesn’t necessarily mean you can avoid probate. A will must go through probate.
The documents are filed with the court to probate a will, and a personal representative is appointed to gather the deceased property and assets and settle all outstanding debts.
The Probate Process
Probate involves getting permission from the court to carry out final wishes stated within someone’s will. In general, there are steps required by the law:
- File a petition – you will have to file a request in the country where the deceased was living at the time of death.
- Give notice – mail a warning that the property is in probate to all beneficiaries.
- Inventory assets – inventory all assets that are subjected to probate and present them before a court, e.g., bank account
- Handle bills and debts – collect money owed to the estate and decide how to settle any debt.
- Distribute remaining assets – after settling all debts and expenses. Then, you’ll give the remaining to the rightful heirs.
- Close the estate – once everything is cleared, submit all records to the court and ask for the estate to be closed.
Attorney fees for probate
The most common way attorneys charge clients is by billing by the hour. The hourly rates vary a lot depending on where you live and how experienced your lawyer is. In the rural areas, costs will usually be less by the hour; but in the urban areas, rates will usually be higher.
Legal fees for probate
If you’re settling an estate yourself, there are no attorney fees, only administrator fees, generally set by statute. It is recommended that as the executor of the will, you set up an estate account funded with the estate assets. However, if recruiting the services of a professional, expect to pay fees for the following: –
- Petition for Probate Fee
- Probate Court Documentation Fee
- Estate Account Setup
- Closing Estate
Who Pays for The Estate Probate Legal Fees?
Until the case has been resolved, you might not be sure who will pay probate fees. In most cases, a 2 percent fee is imposed on the person managing the estate. But if you get lucky and win the case, the court will award the legal fees, but you might not get any reimbursement if you lose.
How much Probate Lawyer Costs?
One of the most overpriced parts of the probate process is hiring a probate lawyer. Unfortunately, these expenses can become overwhelming for many families.
The cost for each case will also depend on whether it’s a simple or complex case.
An affidavit is a written statement or oath from an individual sworn to be true. First, the lawyer or the deponent produces an affidavit in which the deponent takes a commitment in the presence of a magistrate. Finally, the magistrate swears and issues the affidavit.
Settlement Without Court Intervention
A family member or a personal representative may appeal to the court for non-intervention powers whether the deceased died testate or intestate. Unless the deceased specified in the will that the court not grant any person nonintervention powers.
How Probate Lawyers Charge
Probate lawyers use one of three methods for charging probate work: by the hour, flat fee, or an agreed percentage of the value of the estate assets. Your lawyer will give you the benefit of choosing how you pay. For example, you could choose to pay a flat rate per hour or a % of the estate’s assets.
The standard rule is that each party pays for their lawyer. Even so, there are exceptions in some instances. Most notably, if the judge rules in your favor, you can ask the other party to pay your fees and any additional litigation costs. First, however, you need to prove that the other party’s claims are groundless.
Ways to pay
There are three known payment options, depending on your attorney;
- Flat fees – these are fixed charges for specified tasks
- Hourly fees – just as the name states. The lawyer charges hourly rates, but in many states, they have statutes to ensure reasonable rates.
- Percentage of estates value – depending on the value of your estate and the type of property included, the fees can get quite costly.
What does a probate lawyer do?
After the death of a person, the assets must be disbursed amongst the beneficiaries in a manner in line with the state laws and following their wishes as stated in their will.
A probate lawyer consults and guides the appointed executor of the will or the estate’s beneficiaries through the probate process. The lawyer identifies the estate assets and beneficiaries and distributes the inheritance and assets amongst them.
What is probate court?
Probate court is a specialized type of court that deals with the assets, properties, and debts of a person who has died. The general role of the probate court judge is to assure that the deceased debts are paid and disburse the remaining assets to the proper beneficiaries.
Is there a probate court?
Individual states have specialized probate courts. Probate is multifaceted in that it covers the overall legal process of dealing with a deceased person’s assets and debt, the court that manages the process, and the actual distribution of assets itself.
Does a small estate affidavit need to be filed with the court?
In most case scenarios, you don’t have to file a small estate affidavit with the court. Instead, you can submit a death certificate as proof of death along with the affidavit. When a person with a small estate dies, the beneficiaries can claim their assets without going through probate.
What happens at a probate court hearing?
During the first hearing, the executor of the will is chosen. Even though the will might have someone mentioned to act in that role, the court still must do it and appoint their powers to act on behalf of the estate. The court will need to know the relationship between the deceased and the personal representative.
How do I handle probate without a lawyer?
Yes! For most probate cases, a lawyer isn’t required to be present to probate a will. Anyone can interact with the court system and do probate without a lawyer present. Even if a lawyer is required, you might not need them for the entire process. You can hire them for particular issues.
How much does an estate have to be worth to go to probate?
The need for probating an estate is independent of its value. Therefore, the amount will vary based on the estate. For example, certain states can be as low as $20,000, while others can go up to $150,000 to qualify for simple probate.
What assets can avoid probate?
- Assets are owned in the deceased sole name but have a payable on death designation.
- Assets owned jointly by the decedent with a spouse or others, with rights of survivorship;
- Assets owned with a spouse in a particular type of joint ownership are called tenancy by the entirety.
- Assets owned by the decedent through contract rights which are payable to a designated beneficiary at death
Do all estates go through probate?
No law or requirement states a will or property must go through probate. But if the deceased owned properties that are not arranged to avoid probate, there is no way for the heirs and beneficiaries to obtain legal ownership of the property and assets without it. However, there are some exceptions to this.
How do I settle an estate?
Settling an estate can be a long process and often confusing for those going through it for the first time. But when you have a solid checklist, it’s not as complicated as we might think.
In this order, use the following checklist to feel confident you’ve done everything needed to settle your estate correctly.
- Organize important information
- Determine need for probate or attorney help
- File the will and notify necessary persons
- Take inventory and appraise all assets
- Set up a bank account
- Pay taxes
- Pay off any debts
- Distribute assets according to the deceased person’s will
- Close the estate
How do I settle an estate without a will?
Suppose you are the administrator of an intestate estate (an estate without a will) or the estate’s executor. In that case, you can settle the estate by following the probate code or the deceased directives as stated in the will while going through the probate code.
Is it more difficult?
Settling an estate without a will is not impossible or complex but quite common. Of course, as an estate increases in value and complexity, the process tends to take longer. But usually, if there is no will, the estate is split between the surviving spouse and children.
How long does it take?
In most cases settling the estate can take around 9-12 months. However, it can be longer than 12 months, depending on the size and complexity of the estate and the efficiency of the executor. It may even take up to 2 years or more.
Do I need a lawyer to settle an estate?
It’s not always necessary that a lawyer be present to settle an estate. Even so, there are cases when a probate hearing is mandatory. In those cases, you will need an experienced lawyer with knowledge of probate laws to help reduce the stress of many complex procedures.
Can I settle an estate faster with a probate lawyer?
The answer is yes, especially if you’re working with an experienced probate lawyer. The average time to settle an estate is around 9 to 24 months, depending on the size of the estate. But for smaller estates, it can be done faster.
Can I settle an estate without probate?
Probate is not always necessary. You can settle your estate without probate. Most states don’t pressure smaller estates but allow them to skip probate and directly transfer certain assets or property to the heirs or beneficiaries.
How do I settle an estate without probate?
If the deceased created a trust and funded all the assets, you can easily avoid probate. Or, if the estate’s value is under $150,000 and the estate does not own real property like a house or condo, then probate can be avoided through the use of a Small Estate Affidavit.
How to value an estate for probate?
Assets need to be valued at their open market value. This is the price the estate might fetch if sold on the open market at the time of death. It represents the realistic and sensible price of the estate, not the replacement value.
Do I need probate for a small estate?
You don’t necessarily need probate for a small estate, but obtaining one is needed in some instances where the total value of the deceased estate has been deemed small. Going through the probate process is often essential to deal with the person’s estate after their demise.
What is considered a small estate?
If the person who died had less than $50,000 of personal property, it is deemed a small estate and is referred to as voluntary administration. If the deceased had property owned jointly with another person and still had less than $50,000 of personal property, it is a small estate.
What is considered a small estate in the state of New York??
In New York, any estate with real property valued at less than $30,000 is considered small and can pass through probate court much more manageable than large estates if the executor handles the process perfectly.
Why is probate not required on a small estate?
Even if a small estate is placed under the probate process, it doesn’t have to go through the entire formal process if its total value is below the relevant state’s small estate threshold. If the property qualifies as a small estate, the resolution can be quick.
IF most of the deceased small estate was in joint tenancy and beneficiary accounts, but they had personal savings account worth $30,000. Therefore, the estate does not have necessarily have to go through the probate process because the total value of those assets would not surpass the estate limits.
How do you know if probate is necessary?
Luckily not all properties have to go through the legal process. Probate is unnecessary for a “small” estate or if the property is designed to pass outside probate. Some of the common properties that don’t require probate include:
- Property that is jointly owned with a living owner
- Property with a designated beneficiary
- Property that includes a payable-on-death (POD) or transfer-on-death (TOD)
- Property in a living trust
What is the difference between a small estate and all other estates?
Depending on the value of your estate and the state it’s located in, the definition of a small estate varies. Estates that have a value ranging between $50,000 and $150,000 are considered small estates. Any property with a higher valuation is classified as other estate forms based on the asset’s state.
When should I contact an estate attorney?
Most people are intimidated because most probate agencies don’t have a specific price tag for their services. But that should not be the case. Estate attorneys are trained in matters related to probate proceedings. Here are some everyday situations that usually require the services of an estate attorney:
- Small estate owners of associates who need to plan their succession.
- If you have out-of-state property or assets.
- If you have foreign property or assets
- If you are planning to leave assets to an individual who is not a citizen
- If you want to disinherit immediate family members
- If you have a blended family and want to leave assets to your stepchild or stepparent
What is a voluntary administration?
A voluntary administration process is an insolvency procedure giving distressed companies some space from creditors and a chance to restructure. The independent administration takes control of the business for one month as they assess and secure the business assets. They then provide recommendations to creditors on which action is best for the company.
Who may become a voluntary administrator?
A voluntary administrator can be anyone who has been appointed to the role by a company’s directors when the company becomes insolvent, provisional liquidators through court approval or secured creditors of an insolvent company. However, the individual must be registered as a liquidator.
What is the Voluntary Administration Procedure?
Step one: After the administrator’s appointment, all the creditors will receive notice to appear for the first meeting, which takes place eight days after the appointment.
Step two: The administrator then investigates the company’s affairs and reports the findings to the creditors. The primary purpose of the investigation is to figure out if the company can pay for its existing debts.
Step three: After the investigations and report, the administrator calls the creditors for a second meeting. As a creditor, you should be notified at least five business days before the meeting, and the meeting itself should be held within 25-30 days after the administrator’s appointment.
Can I do this myself without an attorney?
You can continue with voluntary administration without involving any lawyer unless going through the court, like provisional liquidators. If you wish to proceed without a lawyer, you can obtain free voluntary administration and other helpful information on the Surrogate’s Court Small Estate Affidavit program.
What Does an Executor Do?
An executor is a person who administers a person’s estate upon their death. The primary work of an executor is to fulfill the wishes of the deceased person based on instructions detailed in trust documents or Will. In addition, they ensure that the assets reach the intended beneficiaries.
Can an executor do whatever they want?
There are a few things that an executor cannot do. For example, the executor cannot sell the estate below market value and cannot self-deal. However, if the executor does not perform due diligence, it can be assumed as self-dealing, which is against the fiduciary duty of an Executor’s role.
Executor Fees by State
|STATE||EXECUTOR FEE FORMULA|
|Arkansas||Reasonable compensation but cannot exceed:
10% of the first $1,000
5% of the next $4,000
3% of the rest
|California||4% on the first $100,000
3% on the next $100,000
2% on the next $800,000
1% on the next $9,000,000
0.5% on the next $15,000,000
For all amounts above $25,000,000, remaining executor fees in California are to be a reasonable amount as determined by the court.
|Iowa||Reasonable compensation but cannot exceed:
6% for the first $1,000
4% for the next $1,000-$5,000
2% for remaining amounts greater than $5,000
|Kentucky||Reasonable compensation but should not exceed 5%|
|Maryland||Reasonable compensation but cannot exceed:
9% if less than $20,000
$1,800 plus 3.6% of the excess over $20,000
|First $5,000 is 5%
Next $20,000 is 4%
Next $75, 000 is 3%
Next $300, 000 is 3.75%
Next $600,000 is 2.5%
Greater than $1,000,000 is 2%
|First $40,000 is 3%
Greater than $40,000 is 2%
|First $15,000 is 4%
Next $85,000 is 3%
Greater than $100,000 is2%
|New Hampshire||Reasonable compensation|
|First $200,000 is 5%
$200,001-$1,000,000 is 3.5%
Greater than $1,000,000 is 2%
|New Mexico||Reasonable compensation|
|First $100,000 is 5%
Next $200,000 is 4%
Next $700,000 is 3%
Next $4,000,000 is 2.5%
Remaining amounts greater than $5,000,000 is 2%
|North Carolina||Reasonable compensation but should not exceed 5%|
|North Dakota||Reasonable compensation|
|First $100,000 is 4%
$100,001-$400,000 is 3%
Greater than $400,000 is 2%
|First $1,000 is 5%
Next $5,000 is 4%
Remaining amounts greater than $6,000 is 2.5%
|First $1,000 is 7%
$1,001-$10,000 is 4%
$10,001-$50,000 is 3%
Greater than $50,000 is 2%
|Rhode Island||Reasonable compensation|
|South Carolina||Reasonable compensation|
|South Dakota||Reasonable compensation|
|First $100,000 is 5%
$100,001-$400,000 is 4%
$400,001-$800,000 is 3%
Remaining amounts greater than $800,000 is 2%
|Wyoming||First $1,000 = 10%
$1,001-$5,000 = 5%
$5,001-$20,000 = 3%
Remaining amounts greater than $20,000 = 2%
Why is probate so expensive?
Most people shun away from the probate process since they consider it too expensive, time-consuming, and challenging. However, sometimes the probate process does not have to be so costly. Still, if there are family controversies, the will is being challenged, or there was fraud or theft concerning the estate, the legal fees could be dramatically higher.
How long do probate cases take?
The probate process typically takes around 24 months from the date of the decedent’s death. Although most cases involve lawsuits and contested complications, the process may take several years or even decades to settle the issues and conclude probate.
Does probate differ in every state?
Yes, probate proceedings differ from state to state. However, most of the states have adopted the Uniform Probate Code. Other states allow a more straightforward probate process for assets considered to be small estates. For example, to avoid probate in California, a small estate has to be valued at $166,250 or less, while in Michigan, the value stands at $15,000 or less.
Reducing Probate Fees
Probate fees can become quite expensive even after you have prepared your final testament. Chances are high. You will go through the probate process. You can avoid or reduce probate fees through various options, such as transferring your property to a trusted fund company.
What Are the Options Available To Avoid Probate?
- Leave a valid will that provides a roadmap of what the executor should do
- Ensure you have paid all debts
- Get rid of properties out of your state
- You can gift property to reduce costs
- To avoid probate, you can spend down the property to reduce its valuation
- Try to transfer the property outside of probate
- Contact an estate planning lawyer
The best way to avoid probate even after leaving a willing is to transfer your property through a trust fund. Bypassing property through a trust fund, you create a trust document and then transfer the property title to the trust. All people named as trustees will have total control of the trust property.
Another option is setting up transfer-on-death or payable-on-death registrations that allow you to name one or several beneficiaries of the account to avoid the probate process. But, again, it’s usually free and simple to create, and the beneficiary can easily claim the money after the descendant dies.
The Small Estate
For the property to be considered a small estate, it must meet the minimum valuation set by the local state authority. However, when claiming small estate property even with a limited probate process, there are documents you can produce that can further reduce the period of the probate process.
- Claiming Property with Affidavits
A small estate affidavit is a legal document authorizing an individual to claim assets after the owner has passed away instead of a lengthy probate process. Before starting the process, ensure you are eligible to create a small estate affidavit.
- Simplified Court Procedures
Simplified minor estate procedures were designed to provide an inexpensive, speedy, and informal way to solve property inheritance disputes.
- State’s Rules
Each state has its definition concerning small estate probate proceedings. Some states allow for a speedy process, while others have regulations to extend the probate period.
What Kinds of Property Count?
For the property to be counted as a small estate, they have to reach the set minimum property valuation limit. Most states have different small estate valuation limits, and you must confirm what value applies to your small estate.
How to prepare and file the tax returns of the decedent?
All income up to the date of death must be reported, and the heir may claim all credits and deductions to which the descendent is entitled. To file the returns, you use Form 1040 0r 1040-SR or, if the descendant qualifies, one of the simpler forms in the 1040 series.
What is a small estate procedure?
A small estate procedure is a simplified court procedure that is an alternative to the longer probate process. The procedure asks the court to allow you to divide and distribute their property to individuals who either have a legal right to inherit or are listed in the owner’s will.
What is a small estate affidavit?
A small estate affidavit is a legal document that authorizes an individual to claim assets after the owner has passed away, which will be in place of a lengthy probate process. Before starting the process, ensure you are eligible to create a small estate affidavit.
What is the Definition of a Small Estate?
For the property to be considered a small estate, it must meet the minimum valuation set by the local state authority. However, each state has its minimum valuation, with the lowest starting at $15,000 while the most extensive stands at over $600,000
Who fills out a small estate affidavit?
To be allowed to file for a small estate affidavit. First, you must prove you are the heir or relative of the deceased owner. Then, after preparing the affidavit, present it to whoever holds the asset. Some states require the affidavit to be filled in court first before claiming the assets.
When to Use a Small Estate Affidavit
A small estate affidavit is primarily used when there is no Final Will, and you want to escape the probate process. Small estates affidavit is only used during limited circumstances, and not all tiny estate can qualify for the affidavit.
Information Needed to Complete a Small Estate Affidavit Form
The affidavit form requires basic information, including the name and addresses of the decedent and their descendants and the immediate relatives and family. In addition, it would help to list the assets you intend to claim, along with their details and value, like motor vehicle registration or bank account number.
What is considered a small estate in NY?
For the property to be considered a small estate in New York, it must be valued at less than $50,000. Therefore, if it falls under the small estate, it will pass through the probate process much quicker than other forms of an estate.
Simplified Probate Procedures in NY
New York has a simplified probate procedure dedicated to small estate properties. The executor files a written request with the local probate court requesting to use the simplified process to take effect. The court can authorize the executor to distribute the assets without jumping through the hoops of regular probate.
How much does probate cost in New York?
Suppose nobody is contesting the will or the choice of executor selected and assuming all the distributees can be found and are willing to sign a waiver of the process and consent to the probate procedure.
How to minimize probate fees?
- Designate beneficiaries
Most valuable assets to allow beneficiaries to be named when writing a will. Naming a beneficiary is easy. You need to request and fill out the payable on death form that a bank or brokerage company will provide.
- Joint ownership
When looking to reduce probate fee costs, you should consider holding property jointly. Owning property jointly allows the asset to be passed directly to your beneficiaries without passing through the probate process.
Common Ways to Transfer Property after Death in NY
By Last Will and Testament
Many of us are familiar with wills and testaments. It is a written document that defines your wishes concerning the distribution of assets upon your death. They will generally include individually owned property, and it falls under the New York Surrogate Court.
By Joint Ownership
Most significant assets are held jointly. After the death of one partner, the other partner automatically takes ownership of the jointly held asset. The process is automatic and does not require the approval of the court.
By Trust (Revocable Living Trust)
The revocable living trust is the most popular type of trust available. You can create a trust funded by property you intend to transfer to the trust through the revocable living trust. The trust will then be passed to your beneficiaries upon your demise.
By Beneficiary Nomination
Life insurance and other accounts require the nomination of beneficiaries who are not subjected to the probate process. The named nominees will receive the assets upon your death through a process attached to the asset. Therefore, if you have nominated beneficiaries, no legal concerns should worry you.
How to make a will in NY
- Decide which property you want to include in the will.
- Decide the individuals who are set to inherit the property
- Select an executor to handle the estate
- Select a guardian for your children (if any)
- Select a person who will manage the children’s property
- Write down the Will
- Sign your will in the presence of witnesses
- Store the will in a safe place
Do I have to make Will?
No, you don’t have to write a will. But in case you die, without preparing a will, the estate will be distributed per the laws on succession.
What Happens if I Die Without a Will?
According to the law on succession, the government will distribute your available assets to surviving family members when one dies without a will. However, there is a high chance that your beneficiaries will get swindled of their inheritance, leading to controversies.
What Happens if my parents die Without a Will?
If a parent dies without preparing a will, you will need to forward a petition under the state’s laws where the parent died. The petition asks the court to appoint you as the personal representative of the assets. This is commonly referred to as an intestate estate.
What happens to your parent’s small estate if they die without a will?
Most small estate settlements usually ignore the wishes contained in the deceased will. However, if no will was left, you can follow the legal inheritance formula available in the state where the tiny estate is located.
Do I Need a Lawyer to Make a Will in NY?
While witnesses are crucial to the authenticity of a final will, they don’t necessarily have to be lawyers. You can prepare your will without the help of an attorney, but you must have a witness who signs the document to complete its formality.
Requirements for Signing a Will in New York
For a will to be considered legal, it must be in writing, dated, and signed by the will’s creator. In addition, the will must have witnesses signing and adding their address under their signatures to make it official. However, writing a will without witness formality is not recommended.
Requirements for Serving as a New York Executor
- The person should be at least 18 years old.
- The person has not been judged as incapacitated by a court
- The intended executor does not have a felony conviction
- There are no limited residency restrictions
What is Probate Shortcuts for “small estates” in NY
New York has a simplified probate procedure dedicated to small estate properties. The executor files a written request with the local probate court requesting to use the simplified process to take effect. The court can authorize the executor to distribute the assets without jumping through the hoops of regular probate if the property value is below $30,000.
How long does it take to settle an estate in NY?
The short answer to this question is that it takes around seven months to three years. However, the average period for probate in New York is around nine months.
How to Avoid Probate in New York
Create a trust document
Making a living trust is one of the ways to avoid probate in New York. To activate the living trust, you need to create a trust document explicitly defining someone as a trustee after your death. Then, you must transfer ownership of the property to yourself as the trustee of the trust. After your death, the successor trustee will inherit the property through the trust.
Have a Joint Ownership
New York supports two forms of joint ownership. Joint tenancy where the property will automatically pass to the surviving owners in case one of them dies. The other is tenancy by its entirety, which is like joint tenancy, except it’s only allowed for married couples and real estate.
Payable-on-death is available for assets such as bank accounts. For this scenario, you control all the money in the account. The beneficiary has no right to the money, and the account owner can spend all the cash if they wish. Upon the owner’s demise, the beneficiary can claim the account directly from the bank.
“Transfer-on-death” form for securities
In New York, you can register bonds and stocks in transfer-of-death forms. For example, if you register an account under TOD, the beneficiary named in the document will automatically inherit property upon the owner’s death. No probate proceedings are necessary. Instead, the beneficiary deals with the brokerage company directly.
Do you have any legal question about probate process? that I didn’t cover in this guide? Email at firstname.lastname@example.org or Call 929-533-1811.
This blog post is written for educational and general information purposes only, and does not constitute specific legal advice. You understand that there is no attorney-client relationship between you and the blog publisher. This blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.