By Dan Barney
Estate Planning and the Law
Although it may be a little late to protect you after death, probate definitely protects your interests and your heirs and insures that your possessions will be distributed in the manner you desire.
Probate is not limited to estates where the decedent had a will. Every estate that holds titled property must be probated if title to that property is not transferred using some other wealth transfer method.
If a person dies without a will, probate may be initiated, however, the guidelines will be established by state law rather than your will.
Consequently, if you do not have a will, (i.e. you die “intestate”), your personal representative, “administrator,” will be chosen by the court according to preferences defined in state law.
Of even greater consequence, your assets will be distributed according to the laws of Intestate Succession. This pattern of distribution, although intended to be fair, may not be what your or your family would want.
Once a probate petition is filed, the court oversees the administration of your estate. What does the court do?
• Initial Hearing – At the initial hearing, the court affirms jurisdiction and the identification of all known heirs, legatees or devisees. A personal representative is identified and sworn to fulfill his duties.
At this time, the court then issues “Letters Testamentary” to the personal representative.
What are “Letters Testamentary?” Letters are simply a formal court document, signed by the judge, which authorizes and empowers the personal representative to act on behalf of the estate.
It is essentially a power of attorney that enables the personal representative to conduct business for the estate.
Usually, after filing, the personal representative should obtain several copies of the letter so that he can establish bank accounts, buy or sell stocks, administer investment accounts, cash mineral interest checks, and buy or sell other property of the estate.
• Accounting – Probate collects, identifies and accounts for all of the assets of a decedent. In addition the personal representative must account for the cash flows into and out of the estate during his administration.
• Notice to Heirs/Beneficiaries – Written notice of the probate hearings is provided to all known heirs. Any qualified person contesting the will or any aspect of the probate action may attend the hearing and challenge the actions of the estate.
• Notice to Creditors – Notice is provided to every known creditor. The notice is also published in a local newspaper once each week for two consecutive weeks.
Creditors have at least 60 days after filing to present claims. If claims are not presented prior to the “presentment date,” they will be forever barred.
This is a special benefit of probate that does not exist with trusts, joint tenancy, or other forms of transfer at death.
Once they are given fair, legal notice, creditors who fail to file a claim lose their right to any claim on the estate.
These elements of a probate are just a few of the special protections afforded by the probate procedures.