Probate is a legal process that takes place after someone dies. It includes:
Typically, probate involves paperwork and court appearances by lawyers. The lawyers and court fees are paid from estate property, which would otherwise go to the people who inherit the deceased person’s property.
In the state of Utah, the entire probate process can take as little as four to five months. This assumes that the process proceeds quickly and there are no impediments to paying debts and dividing the remaining assets. Since the process is not always ideal, it’s important to keep in mind that the probate process can take several months and possibly years as complications arise
Probate usually works like this: After your death, the person you named in your will as executor or, if you die without a will, the person appointed by a judge—files papers in the local probate court. The executor proves the validity of your will and presents the court with lists of your property, your debts, and who is to inherit what you’ve left. Then, relatives and creditors are officially notified of your death.
Your executor must find, secure, and manage your assets during the probate process, which commonly takes a few months to a year. Depending on the contents of your will, and on the amount of your debts, the executor may have to decide whether or not to sell your real estate, securities, or other property. For example, if your will makes a number of cash bequests but your estate consists mostly of valuable artwork, your collection might have to be appraised and sold to produce cash. Or, if you have many outstanding debts, your executor might have to sell some of your property to pay them. In most states, immediate family members may ask the court to release short-term support funds while the probate proceedings lumber on. Then, eventually, the court will grant your executor permission to pay your debts and taxes and divide the rest among the people or organizations named in your will. Finally, your property will be transferred to its new owners.
Most states allow a certain amount of property to pass free of probate or through a simplified probate procedure. In Utah, for example, you can pass up to $100,000 of property without probate, and there’s a simple transfer procedure for any property left to a surviving spouse.
In most circumstances, the executor named in the will takes this job. If there isn’t any will, or the will fails to name an executor, the probate court names someone (called an administrator) to handle the process. Most often, the job goes to the closest capable relative or the person who inherits the bulk of the deceased person’s assets. If no formal probate proceeding is necessary, the court does not appoint an estate administrator. Instead, a close relative or friend serves as an informal estate representative. Normally, families and friends choose this person, and it is not uncommon for several people to share the responsibilities of paying debts, filing a final income tax return and distributing property to the people who are supposed to get it.
Probate rarely benefits your beneficiaries, and it always costs them money and time. Probate makes sense only if your estate will have complicated problems, such as many debts that can’t easily be paid from the property you leave. Whether to spend your time and effort planning to avoid probate depends on a number of factors, most notably your age, your health, and your wealth. If you’re young and in good health, adopting a complex probate-avoidance plan now may mean you’ll have to re-do it as your life situation changes. And if you have very little property, you might not want to spend your time planning to avoid probate because your property may qualify for your state’s simplified probate procedure.
Utah has a procedure that allows inheritors to skip probate altogether when the value of all the assets left behind is less than a certain amount. All an inheritor has to do is prepare a short document, stating that he or she is entitled to a certain asset. This document, signed under oath, is called an affidavit. When the person or institution holding the property — for example, a bank where the deceased person had an account gets the affidavit and a copy of the death certificate, it releases the asset.
The out-of-court affidavit procedure is available in Utah if the value of the entire estate subject to probate, less liens and encumbrances, is $100,000 or less. An affidavit may also be used to transfer up to four boats, motor vehicles, trailers or semi-trailers if value of estate subject to probate, excluding the value of the vehicles, is $100,000 or less. There is a 30-day waiting period.
Simplified Probate Procedures
Utah has a simplified probate process for small estates. To use it, an executor files a written request with the local probate court asking to use the simplified procedure. The court may authorize the executor to distribute the assets without having to jump through the hoops of regular probate.
You can use the simplified small estate process in Utah if the value of the entire estate, less liens and encumbrances, does not exceed the homestead allowance, exempt property, family allowance, costs of administration, reasonable funeral expenses, and reasonable medical expenses of the last illness. The executor files a sworn statement that says the estate assets are less than the value described above, describes the estate assets, declares the executor has distributed assets to the inheritors, and sent the inheritors and known creditors a closing statement. and provided them with a closing statement.
There are several steps to the legal probate process:
First, an executor or representative of the estate will start the probate process by filing the death certificate with the probate court along with the will. If there is no will, then the decedent is intestate. The court initiates procedures for intestate probate, which take longer than if there was a will. If there is a will, the process is more streamline.
If there is a will, the court authenticates the will to make sure it is the actual, intended will of the deceased, called a testator. They also check that the will has the required witnesses and notary as their state law requires. If your will has a “self-proving” affidavit, this will speed up the probate process. This affidavit, signed by the witnesses in front of a notary, states that the will is authentic. This eliminates the step of having the witnesses testify to the will’s authenticity in court.
The next step is for a probate court judge to approve someone to administer the estate. The judge appoints the executor or personal representative named in your will. If there is no will, the judge will appoint someone, usually a family member, to handle the estate. The personal representative will receive “letters testamentary,” which is essentially the probate court giving the personal representative permission to handle the decedent’s estate. The personal representative uses these letters to contact banks and attorneys and manage the estate administration.
Because a personal representative will handle money, property, and assets, the court may require the personal representative to post a probate bond. The estate pays for the cost of the bond. However, you can waive the bond requirement for your personal representative in your will. This will save your estate an additional expense.
The personal representative now has the task of identifying beneficiaries and notifying creditors of the probate administration. The creditors then have a specified time frame to submit claims against the estate. If they do not respond during that time, they cannot collect on those claims.
The personal representative also must determine the value of all probate assets. That may mean getting real estate appraisals, making an inventory of personal property, and valuing assets. The personal representative may hire appraisers to determine property values.
The first debts usually paid from your estate are funeral expenses, last illness expenses, and taxes. The personal representative then pays any valid creditor claims. The personal representative can dispute or settle creditor claims on behalf of the estate.
After paying estate debts, taxes, and claims, the personal representative distributes the remaining assets to the beneficiaries named in your will. If there is no will, then your heirs receive distributions according to state intestacy laws.
To close probate, the personal representative files a final accounting with the court. The final accounting reports all the assets of the estate and income generated on those assets. The report also details all debts paid and distributions made to beneficiaries or heirs. When the court accepts this report, they discharge the personal representative from their probate duties and formally close the probate estate.
Property and assets that are only in your name are part of your probate estate. For example, if you owned a house titled exclusively in your name that home’s value adds to your probate estate total. So, it is helpful to understand what probate property is. Many assets transfer outside probate—for example, a bank account with a “transfer-on-death” (TOD) designation. If you name a transfer-on-death beneficiary, they receive the bank account upon your death. Therefore, it does not go through probate. Similarly, life insurance benefits go directly to your named beneficiaries, so they are not part of your estate.
Other property and assets that do not go through probate are:
Examples of property or other assets that do go through probate are:
Beware, however, if you fail to name a beneficiary on any accounts, those accounts will fall into your probate estate. Additionally, suppose a beneficiary you name on an account dies before you. In that case, that account may not have an owner and become part of your probate estate. Again, a probate court handles property that does not have a named owner. So, if you plan ahead, you can significantly reduce your probate estate.
Probating a simple estate with no issues can take anywhere from nine months to a year. However, if there is a will contest or large estate, it can take two years or longer.
There are many fees and expenses in probating an estate. Typically, probate costs range from 3-5% of the estate’s value. Here are some examples:
The best way to avoid probate is by not having any probate property. That way, your estate can qualify under your state’s simplified probate procedure. You can skip a long, drawn-out expensive probate process by filing affidavits with the probate court.
Here are four ways you can avoid probate:
If titled correctly, owning a property with another owner can take your interest in the property out of your probate estate. When you die, the ownership of the property automatically transfers to the surviving owner. Those ownership types are:
A revocable or living trust is a legal structure to bypass probate and give your property and assets to others. When you title property in the trust’s name, the trust becomes the owner of the property. It is no longer considered part of your estate even though you can use the property for your benefit. After your death, you can instruct your trustee to distribute the assets to your beneficiaries outright. Or the trustee can hold the assets until your beneficiaries become adults. With a revocable trust, you can move property in and out of it during your lifetime or revoke it altogether.
Make sure you name beneficiaries on all your bank, retirement, and investment accounts, as well as any life insurance policies. In addition, have backup beneficiaries listed in case your first named beneficiary predeceases you.
The less property you own individually, the less probate property you have. You can give gifts to charities, family members, and friends to reduce your estate.