Probate is the legal process of administering an estate. The following steps take place after someone dies:
- Presenting the deceased person's valid will.
- Finding, gathering, and listing the decedent's property.
- Getting the property appraised, where necessary.
- Paying any outstanding debts and taxes the decedent owed.
- Following the will's instructions to distribute any remaining property.
Part of the process also includes transferring title and ownership of various assets to the inheritors.
If this all sounds like a complicated and costly hassle, it often is. Probate can involve lots of paperwork and fees to lawyers, accountants, appraisers, and executors, to say nothing of court costs. The money funding all of these expenses would otherwise go to beneficiaries. Probate costs can amount to roughly 5% to 10% of the value of the estate. So with an estate worth $200,000, probate could eat up $10,000 to $20,000 -- a sizable chunk. In addition, property remains in a kind of limbo while in probate, which can last months or even years.
Probate does tend to be a methodical and unbiased system, since a judge oversees it. But for most people, the downside of probate overshadows its upside. It's best to avoid probate, and you can, if you take the time to learn more about it and plan ahead.
Learn more about estate planning issues at the Estate Planning Links website.
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