Probate 101: What You Need to Know

Understanding the Purpose of Probate

Notoriously slow and expensive, you might know probate is something you want to avoid, much like a speeding ticket, an IRS audit or root canal. But what exactly is it?

Probate is the court process often required to begin estate settlement. On average, an estate settlement can take more than a year and can cost thousands of dollars in attorney, court, and administrative fees. Probate laws vary state by state as do the costs and the average duration.

Because probate can be complex, we turned to estate settlement experts at ClearEstate, to learn more about what it is, how it works and how to simplify it. Like

What exactly is probate and how does it work? 

Sara Hillier, ClearEstate’s Senior Director, Trust Solutions: 

“Probate is essentially the court process that verifies the authority of the executor of the estate. It’s required whenever the third parties that the executor is going to deal with (banks, insurance companies, etc.) say that they need it to give them proof that they have the legal authority over the estate. 

Typically, it involves the executor attesting to the various facts involved: who the deceased was, who the executor is, who the beneficiaries are, presenting the original Last Will and Testament along with an inventory of assets and liabilities. In most jurisdictions, there is some sort of fee or cost of doing that.”

Is probate only for the wealthy?

Alex Gauthier, Clear Estate Co-founder & CRO: 

“Probate is not just for wealthy people. It is not for the one percent. It is for 85 percent. Most people at some point need to go through probate. If you don’t have a will, it is immediate probate whether you are wealthy or not in almost all scenarios.

We help a lot of families and in some cases, there may be a parent who died that lived in a home, didn’t own a house, and only had a pension and a few thousand dollars in the bank, and that’s a scenario that usually doesn’t require probate if they had a will. But that’s the exception.” 

What do you wish families understood about probate?

SH:

“I see this happen a lot. People mistakenly believe they don’t need help and that’s when they get themselves in trouble. Fast forward a few weeks, and things can go sideways very quickly. Oftentimes the last surviving parent was the glue keeping everything on track. Even in the best of relationships, we are talking about typically unchartered territory for most individuals. The process of estate settlement is not easy to go through even when things are simple and even with the best of family relationships. I hope everyone can get through it maintaining relationships free from strain, but the reality is that often it is near impossible without support.” 

Why can probate sometimes be so unpleasant? 

AG: 

“There’s a ton of paperwork. It’s essentially a very thorough amount of documentation and information. Government, banks, and courthouses all ask for the same information over and over in different formats. So, you have to repeat the same information multiple times. There is a lot of research and depending on how well-organized the deceased was, it is either a somewhat painful experience or an extremely painful process and can be a very time-consuming process as well. 

And most executors are doing this for the first time and will do it once in their lives and by definition are ill-prepared for it. And a lot of attorneys don’t like doing it either.” 

What papers should you gather after the death of a loved one? 

SH: 

“What you need to be looking for is any kind of bank statements, preferably recent ones. The most recent bank statements or investment account statements are going to give you a wealth of information: the institution, the account number, the type of account, and the owners of the account. Certain statements will also show you if there is a beneficiary on the account and typically show you the balance so that gives you an idea of the value of the account.

Other types of documentation are any title deeds for any real property, and they would show the legal name of the property and have the legal owners as well. You may also want to find the title to determine the ownership of any vehicle, sometimes located in their filing cabinet or the vehicle itself.

Insurance policies should list the owner and the beneficiaries as well as the terms of the policy. 

You will also want to gather information about liabilities like mortgages on the real estate, utility bills, and maintenance expenses.” 

Probate is known as nightmarish for some. Why is that?

SH: 

“One example, if you live with your spouse, but the property is registered only in one spouse’s name and then that spouse dies, the surviving spouse has to go through the probate process, even though there is a will and they are the sole beneficiary. That’s a good, common example of the surprising impact of not carefully considering what should happen when someone passes away. So, now the surviving spouse is grieving and dealing with a million things, then they have to go through this difficult process that can take months to complete.” 

Is having a will enough to help avoid probate?

AG: 

“Estate planning is multi-faceted, and a will is just never enough. The will is a great tool in the toolkit, but it’s never one size fits all. And the reality is that most people don’t have a will or trust, independently of wealth. We deal with some high-net-worth estates that are absurdly without a will or trust.” 

SH: 

“If there is a will, it is one of the first things you’ll want to review. It is going to indicate who the executor is, the person now responsible for doing this work. But just because you have a will doesn’t necessarily mean that you have proof of your authority for third parties like banks. The probate process is what produces the proof of your authority.” 

Will creating a trust help you avoid probate?

SH: 

“An irrevocable trust is a very common strategy where you transfer your assets to the trust which enables the assets to avoid the probate process. But in these situations, it is very important that a successor trustee understands what is in the trust and what is not. Quite often, assets changed, more were purchased, and didn’t necessarily get scooped back up into the trust through a planning process.”

How did your personal experience inform your career?

AG:

“I lost both of my parents. I lost my mom and became the executor of the estate. She died just before the pandemic. I was very involved at work, managing the pandemic, there were layoffs and I realized I wanted to make a difference. When life gives you lemons, you make lemonade. It is a great reminder that even through tough situations something beautiful can come out of it and now we are helping tons of people.” 

What can you share about self-care during the probate process? 

SH:

“Understanding that it is ok that you don’t understand what you have to do and it is worth it and prudent to engage professional support and assistance. Don’t feel pressured to proceed with things because people are ‘in your ear.’ Don’t do anything in haste, take your time, know that generally speaking, executors have a year before any court will question your progress. Take a deep breath, take time to understand the important steps and considerations involved. It is going to be a challenging process, it is going to take time and that’s ok.”