Probate

Probate is an estate planning term, also known as probate code, that reviews a deceased person's will and administers their estate. This typically involves a probate court. It involves organizing and distributing the dead person's money and assets after tax and debt payments.

After an asset-holder passes away, the probate court appoints an executor named in the will. In terms of estate planning, if there is no will, an administrator is appointed to administer the estate assets. Probate is the process of evidencing that the document is the last testament of the deceased. It also proves there are no challenges to it.

Probate cases usually occur in the appropriate probate court in the state and country that the deceased person resided at the time of their death. If there is no valid will, the title to the property and any living trusts will pass under state intestacy laws to "heirs at law".

Usually, one-half is given to the surviving spouse, and the remainder is divided equally among other family members. With or without a will, the property must go through the probate proceedings.

Formal probate is the analysis and transfer administration of estate assets previously owned by a deceased person. In estate planning, when a property owner passes on, their possessions are reviewed by a probate court. A probate judge provides the final ruling on the division and distribution of assets to the beneficiaries under the specific probate laws.

A probate proceeding begins by analyzing whether or not the deceased person has left a legalized will. In most cases, the dead person has established documentation on distributing their assets amongst the beneficiaries.

In estate planning and according to state law, most probate processes vary depending on the instructions left in the deceased person's will. This includes assets, real property, creditors, and beneficiaries the estate has. Below is a step-by-step probate process:

1. Authentication of the last will and testament
   Most states have laws that require anyone with the deceased's will to file it with the probate court, which must be done at the earliest convenience. It is also when a petition to open probate of the estate is done. Often it is necessary to file a death certificate with the will and the petition.
2. Appointing an executor to oversee probate
   The judge will choose an executor to manage the case. This person oversees the probate process and settles the decedent's estate.
3. Posting bond
   A bond is like an insurance policy, that pays back the estate if the executor does something wrong in the case. This could be international or unintentional.
4. Locating the decedent's assets
   The first task is to locate and gain possession of the deceased's assets. This ensures the assets are protected throughout probate. Some people have hidden assets that are not listed in their wills.
5. Determining the date of death values
   The executor uses statements and appraisals to determine the value of assets at the date of death. The court or executor will hire appraisers to valuate certain assets. In some states, the executor must issue the court with a written report listing everything the deceased owned and its value along with how it was obtained.
6. Identifying and notifying creditors
   The executor must identify the decedent's creditors and notify them of the death. Creditors may be limited by how long they have to request payment for any outstanding bills. The exact period varies by state.
7. Paying off the decedent's debts
   Verified creditor claims are then paid. The executor uses the deceased's funds to pay all the decedent's debts, including those incurred during the last months of life.
8. Preparing and filing tax returns
   The executor must file the deceased person's final tax return for the year they passed away. The executor determines if the estate must pay any remaining estate taxes and files these tax returns. Sometimes assets need to be liquidated to raise money to pay off any outstanding debts. The executor has roughly nine months to file and pay any estate taxes after the decedent's date of death.
9. Reasonably distributing the estate amongst the heirs
   Once the legal process is complete, the executor can petition the probate court to distribute the leftover assets. The court may grant permission after the executor supplies the probate court with a complete account of every financial transaction that has taken place during the probate process.

In the probate court, individuals can apply for a grant of probate if the estate has any of the following assets:

• Large bank accounts.
• Life insurance policies.
• Retirement plans.
• Real estate.
• Small estate.
• Investment portfolios.
• RRSPs, RRIFs, or insurance money that goes into the estate.
• Anything that requires legal evidence of the right to manage the assets.

The above items have to be solely in the name of the deceased. A Grant of Probate is not needed for assets in a trust that the person who passed away set up while alive or for managing joint property that goes to the other joint owner.

Within three to six months of the death, a grant application is made. Probate generally takes about a year for most estates, depending on the size and complexity of the estate.

International probate can be more complicated and usually takes six months to two years. Sometimes disputes arise between the executor, beneficiaries, creditors, or tax authorities that can delay the probate process.

Probate can take time and money, and the heirs are the ones who will have to pay. Given that probate proceedings can take up to two years to process, the assets are typically "frozen".

This is until the court decides on the distribution of the property. Probate generally costs between 3% and 7% of the total estate value. There are also filing fees that have to be paid.

A person must file several non-contentious (NC) forms if there is no dispute over the will. While not every document needs to be completed, below is a list of the most common.

• Application form.
• Affidavit form.
• Deceased certificate.
• Original copy of the will.
• List of beneficiaries.
• Inventory list.
• Affidavit of Witness to Will.
• Affidavit of Handwriting.
• A written estimate of the value of the estate,
• Renunciation of Probate.
• Renunciation of Administration with the Will Annexed.
• Renunciation of Administration.
• Affidavit to Dispense with a Bond.
• Consent to Waive Bond.
• Notice to Spouse/Adult Interdependent Partner of Deceased.
• Notice to Dependent Child of the Deceased.
• Notice to Public Trustee.