I THOUGHT PROBATE WAS COMPLICATED

Sometimes I think people fear probate more than they fear death itself. They want the management of their estate to be as simple as possible when they pass-on, and they think that probate is arduous and time-consuming. Many believe that the probating of their estate will involve government interference and taxes.

So, what is probate? “Probate” simply means the court procedure through which your Will is proven to be valid or invalid. But perhaps it would be better if I explain probate by example.

If someone passes away with a Will, their executor will take their original Will and an original death certificate to the Surrogate’s Office for the county in which the person lived. At the Surrogate’s Office, the executor will fill-out a simple questionnaire, called an “information sheet.”

The information sheet asks approximately twenty questions, such as the decedent’s name, address, and date of death. The executor gives the original Will, the original death certificate, and the completed information sheet to the Surrogate, along with a check for about $70, and the process of probate is over.

That’s it! That is the process of which so many people live in fear. It takes about twenty minutes.

Soon afterwards, the Surrogate will issue “Letters Testamentary” and “Executor Short Certificates” to the executor. The Letters Testamentary officially appoint the executor as the representative for the decedent’s estate. The Executor Short Certificates are documents that the executor can use to collect the assets of the estate; in other words, the executor can take a Short Certificate to a bank where the decedent had assets invested and remove those assets from the bank account.

Of course, there could be some complications in the probate process. Perhaps the decedent’s Will wasn’t “self-proving.” Most Wills drafted since 1982 are self-proving, meaning that none of the witnesses to the signing of the Will need testify as to the fact that the decedent actually did sign the Will. If the Will weren’t self-proving, the executor would have to find one of the witnesses to the Will or someone familiar with the signature of the witnesses, if the witnesses were deceased or otherwise unavailable. The witness would then certify that they did in fact witness the signing of the Will.

But it can’t be that simple, can it? Well, yes and no. What I have described above is “probate,” but what most people think about when they say “probate” is actually “estate administration.” Probate is part of estate administration, but some of the more difficult tasks occur after the Will has been probated.

In the estate administration, the executor will (1) collect the assets of the decedent, (2) pay any debts that the decedent incurred during life, (3) prepare any tax returns that must be filed, (4) pay any income, estate, or inheritance taxes that may be owed, and (5) distribute the assets of the estate to the beneficiaries. It is these five steps that can be difficult and time-consuming, or not.

Whether the estate administration process is difficult or easy depends upon several factors. First, did the decedent have a comprehensive and thought-out estate plan? Putting some thought into your estate plan can greatly reduce the hassle of your estate administration for your executor.

Second, how do you “hold” your assets? Do you have five bank accounts, the common stock of twenty different companies that you hold in certificate form, and real estate in different states? Or, are all of your assets held in one brokerage account? Simplicity in life equates to an easy estate administration.

Lastly, to whom are your assets passing and how much are you worth? I don’t advise being poor or leaving someone out of your Will for whom you wish to make a provision, but if you’re worth $5,000,000 and you’re leaving your estate to relatives, friends, and charities, you’re estate will be more difficult to administer than if you’re worth $300,000 and you’re leaving all of your assets to your children.

While probate is simple, estate administration can be difficult. To ease any potential difficulties for your family, you should have an estate plan in place, and you should discuss your plan and financial situation with the chosen executor of your estate.