What is probate?
Probate is the legal process of distributing your assets according to your wishes, which includes determining the validity of your will, gathering your assets, paying your debts and taxes and then distributing the remaining assets according to your last will. To get the process started Your Personal Representative, the Executor, will submit your will to probate court to have it validated. The main advantage of probate is that the probate court is supervising the entire proceedings, and the probate laws are being followed.
What Steps are involved in the Probate Process?
Probate process can be a complicated, lengthy and confusing process, but here is the general process; the probate process involves two steps:
- Pays debts you owe, including taxes
- Transfers assets to your beneficiaries, as per your will
The probate court oversees the probate process to make sure everything goes according to the probate laws and your will. Because probate courts are not federal courts, the processes they follow will vary. Despite their differences, these courts all pretty much follow the same basic processes:
- Swearing in your Executor
- Notifying heirs, creditors, and the public that you are, indeed, dead
- Inventorying your property
- Distributing your estate
Cost of Probate
There can be substantial cost involved in probating an estate, so it makes sense to avoid or limit full probate where possible legally [we will discuss legal means to do this in the next article]. Although probate costs will vary from province to province and state to state, they average range is between 0.5% and 2% of your estate. But that is not all, there are more costs associated with distributing your assets, some other costs are executor and attorney fees, executor fees can range up to 4%. Then there are always taxes your estate will have to pay before transferring assets.
How Long Does Probate Take?
The length of probate will depend on the complexity and seize of your estate, the larger and complicated your estate is the longer it will take to settle. It also will also depend on if you have a valid legal will and whether it will be contested by others or not. On average probate process can takes between 1-2 years if there are no complications, however in some cases it goes on for decades. To speed up the process and avoid complications it is highly recommended to have an updated and valid will.
If you need more information regarding probate and estate planning, please consult a qualified estate lawyer and/estate planner.
In the next article we will discuss ways to reduce your probate costs and leave more for your beneficiaries (legally).