Understanding Probate

A Basic Guide to the Probate Process

I. WHAT IS PROBATE?

Probate is the legal process regarding the administration and distribution of the estate of a deceased person (or "descendent"). It is administered under the jurisdiction of probate courts.(See our Probate Glossary for assistance with probate terminology).

The court makes sure that the decedent's real and personal property is identified, inventoried and appraised, and ensures that any applicable debts and taxes are paid before the balance of the property is distributed to the heirs.

Probate is a very time consuming and paperwork intensive process. Most people hire a probate attorney to help them with the probate administration process.

Most probate estates can be administered in one to two years, but some may take longer.

Probate is concerned with:

  • Cataloging all property of the deceased
  • Paying any debts, claims or taxes that are due
  • Collecting rights to any income (royalties, stock dividends, etc.) to which the deceased was entitled
  • Settling financial and property disputes
  • Liquidating property (real or personal) of the deceased
  • Distributing or transferring the remaining property to heirs

A personal representative is appointed by the Court to administer the decedent's estate. A personal representative can have various names (Executor, Administrator, etc.), depending on the type of probate estate, but each personal representative has similar duties and responsibilities, which include managing the probate estate. Usually, in a will, the decedent names an "Executor" to act as personal representative. If there is no will or decedent failed to name an Executor, the court will appoint a personal representative called an "Administrator." The Executor or Administrator will fulfill many of the same duties listed above.

II. HOW THE PROBABTE PROCESS WORKS

The following outline can help you understand the probate process and can show you which phase of the process you may be experiencing.

Phase One: Filing Petitions and Court Dates

The law and the unique probate language can make understanding the probate process difficult to grasp. If certain deadlines are not met, the probate case will likely be delayed, and there could be a greater chance for something to go wrong.

While you can file the necessary court documents yourself, an experienced probate attorney should always be consulted to assist in ensuring that the estates of your loved ones are properly handled.

Probate administration is initiated by filing a petition for probate with the court.

Probate administration is initiated by filing a petition to open the estate to appoint a personal representative (Executor or Administrator) who must closely follow probate procedure and carefully account for and distribute estate assets.

A personal representative may be appointed with "full authority" under the Independent Administration of Estates Act, which allows certain actions, like selling real property, to be taken without court approval. Actions conducted with "full authority" can speed up a probate administration, but must be cautiously approached since court approval is not being sought. Alternatively, a personal representative can be appointed with "limited authority," which would require court approval for certain actions. For example, if the personal representative requested Court approval of the sale of estate real property, it is very unlikely that anyone could allege that the personal representative sold the property for too little since the Court approved the sale.

The court will usually set a hearing date for your petition within 120 days after the petition is filed.

Prior to the hearing on the petition to appoint a personal representative, each beneficiary should receive notice and a copy of the petition for probate, including any applicable will.

At or before the hearing to appoint a personal representative, the heirs will have an opportunity to consent or object to the appointment. Some heirs may also object to the admission of a will, often referred to as a "will contest," while others may object to the particular person seeking to be the personal representative.

Although the California Probate Code establishes rules of priority for parties who file competing petitions for probate, a trial is sometimes the only method to resolve such a dispute. Certain countries require the parties to mediate their dispute before the case goes to trial. Mediation is an informal process of resolving disputes with the help of a neutral third party usually experienced in the legal area of the dispute. The mediation process is less time consuming and less expensive than a trial, and usually produces an amicable resolution.

A probate administration begins once a personal representative is appointed.

If the petition has been properly prepared and presented at the hearing, the Court will review it and likely appoint a personal representative. Otherwise, the hearing will likely be continued for about thirty days.

When the petition for probate is approved, Letter of Administration (no will) or Letter Testamentary (with a will) are issued to the personal representative. The issuance of Letters is the starting point of a probate administration. These Letters empower a personal representative with authority and responsibility to collect and inventory estate property, identify and settle creditor claims against the estate, and sell real and personal property (among other duties).

Preparing the estate inventory means searching for all property belonging to the estate, such as houses, bank accounts, investments, automobiles and other items of personal property like jewelry and furniture. After assembling a list of the property, the personal representative will forward the list of property to a Court appointed probate referee, whose job it is to place values on the particular items.

For each probate estate, a probate referee is appointed by the Court to appraise estate assets with a date of death value.

A personal representative must also publish a "Notice to Creditors" in a local newspaper. The personal representative will also notify all known creditors that a claim must be filed if a debt is owed to them. Anyone claiming that the deceased owed them money has a limited amount of time to file a claim in the estate. Creditors of the deceased usually have about four months to file their claims after the estate is opened. Upon receipt of a creditor claim, the personal representative can accept (and pay) or reject the claim in whole or part. A creditor can file a separate civil lawsuit against the estate on a rejected claim, the effect of which generally prolongs the administration of the estate for months, or sometimes years.

Phase Two: Additional Pleadings, Filings and Settlements

Probate is an on-going process of filings, notifications, and applicable settlements. Any missed steps can delay the distribution of an inheritance.

These notice, filings and actions usually include:

  • Notice to the Department of Health Services for potential Medi-Cal recovery by the State
  • Filing an Inventory & Appraisement (with the help of a probate referee) of estate assets
  • Paying any State and Federal Taxes that are due
  • Allowing or rejecting creditor claims
  • Initiating a lawsuit to recovery property (e.g. homes, cash, automobiles, etc.) that belongs to the estate, but which is being held by another person or entity

Note that some sizeable estates close without filing tax returns. If a Federal Estate Tax Return (Form 706) is due, the estate cannot close until the Internal Revenue Service (IRS) issues a "closing letter" approving the tax return, which may take up to six months to be prepared by an IRS agent and delivered to the personal representative.

Phase Three: Closing and Distributions

After the estate assets have been inventoried and appraised, and most often times liquidated, the personal representative must prepare a petition to close the estate and distribute the remaining assets.

This petition must disclose all the actions taken by the personal representative, including an accounting of his dealings with the estate assets, and must request a proposed distribution of remaining assets. An accounting is sometimes waived by the heirs, which may facilitate an earlier distribution of assets. Unless all the heirs waive the requirement of an accounting by the personal representative, an accounting must be prepared.

Again, the court will usually set a hearing date within sixty to 120 days after the petition to close the estate is filed. The interested parties in the estate are usually provided with notice and copy of the petition for their review. If an interested party has an objection, the party may contest the petition, which is usually done by filing written objections with the court and serving those objections on the other interested parties.

Any contested actions on the petition to close the estate will likely require a court hearing or perhaps a trial, either of which will further delay distribution of the inheritance.

If all goes smoothly, the final actions in the probate will be:

  • Obtaining a court order of distribution
  • Closing the estate accounts
  • Making final distributions to beneficiaries
  • Getting receipts from beneficiaries for distributions made to them
  • Filing the Order of Discharge releasing personal representative from any further duties

III. A FINAL WORD ABOUT THE PROBATE PROCESS

Probate often lingers on well past the point that people think it should. The probate process is not designed to move quickly. The final settlement, disbursement and distribution processes can also go on for months. Even years.

There is a way, however, to receive your inheritance distribution in a much more timely manner. It's called advance inheritance, and it offers you an immediate cash-out solution.

Instead of heirs having to wait for the estate to close, Advance Inheritance, LLC can provide heirs with an early cash advance. This means that heirs no longer have to wait to access their inheritance.

Heirs are able to receive cash advances on their inheritances before the close of probate.

How Does Advance Inheritance Work?

Unlike a bank providing a loan based on your credit, Advance Inheritance, LLC will give you cash for your inheritance now, regardless of credit history, employment or financial situation. There's no waiting months or years for probate to close to get the money you need now.

  • The money Advance Inheritance, LLC provides is not a loan
  • There are no monthly payments
  • There are NO up-front fees, NO points and NO hidden charges

We collect our funds directly from the personal representative when the estate proceeds are finally distributed, whether that occurs months or years later.

Unlike the probate process, we move very quickly. An heir can receive from $5,000 to $100,000 generally within a few days after returning our signed paperwork.

Call Advance Inheritance, LLC at 800-624-0878 if you are interested in realizing the benefits for your inheritance now. Our knowledge and friendly staff will answer any questions you have about our services or the probate process.

IV. PROBATE GLOSSARY

Administrator

A court appointed person who administers the estate of a person who died without a will.

Beneficiary

An individual or entity to whom a gift or property is made.

Blocked Account

Cash or securities that are placed in a bank subject to withdrawal upon court order.

Codicil

An amendment or supplement to an existing will.

Creditor

A party to whom the Decedent owes money.

Creditor Claims

The document representing a creditor's basis for payment of a debt. These claims are usually filed with a Court and served upon the personal representative or the attorney.

Decedent

A person who has died.

Estate

A person's total assets, both real and personal, which are managed by a personal representative.

Executor

The person named in will to carry out the directions as set forth in the will. This person is the Personal Representative of the decedent's estate.

Fiduciary

A person or organization that manages property for a person, with a legal responsibility involving a high standard of care, e.g., conservators, guardians, personal representatives, agents or trustees.

Guardian

A person appointed by court to protect and manage the personal care or financial affairs, or both, of a minor.

Heir

A person who would naturally inherit property through a will, or from another who died without leaving a will.

Holographic Will

A will that is handwritten and signed by the person making the will.

Intervivos Trust

A trust set up during the lifetime of a person to distribute money or property to another person or organization (as distinguished from a person who transfers money or property after death).

Intestate

Without a will. Opposite of Testate.

Irrevocable Trust

Trust wherein the grantor has expressly released the power of revocation.

Letters of Administration

The court document that establishes the petitioner's authority to act as personal representative (administrator). Letter Testamentary are issued to an executor.

Notice of Proposed Action

Formal written notice by a personal representative with full authority (under the Independent Administration of Estate Act) to the interested parties in an estate, of the intent to take certain action (e.g. sell real property) on or after a certain date.

Personal Property

Anything owed by a person that can be moved such as money, securities, jewelry, etc.

Personal Representative

A person appointed by the court to administer a decedent's estate.

Petition

A written, formal request, properly filed with the Court, for a specific action or order. Some form petitions are preprinted and available on the Court's websites.

Probate

The legal process of administering a decedent's estate. Also, a judicially supervised process for marshaling a decedent's assets, paying proper debts, and distributing the remaining assets to heirs.

Probate Court

The court that handles matters concerning wills estates, such s the distribution of property or money to those named in a will. In California, the Probate Court also handles guardianships and conservatorships.

Property

Anything that can be owned such as money, securities, land, buildings, etc.

Real Property

Land and immovable objects on the land.

Revocable Trust

A trust in which the person making the trust retains the power to revoke the trust.

Small Estate

A decedent's estate may avoid a formal probate administration and have property transferred directly to an heir if the decedent's estate meets the requirements of California Probate Code ยง13100 et. seq. (e.g. estates less than $100,000).

Successor Fiduciary

The next person or organization appointed if a vacancy arises in a conservatorship, guardianship, or decedent's estate because of the fiduciary's death, removal, or resignation.

Testate

Having made a valid will. Opposite of intestate.

Testator

A person who makes a will.

Testamentary Trust

A trust created by a will.

Trust

The handing over of property to a person to be held for the benefit of another (i.e. held in trust).

Trustee

A person or organization authorized by a trust to hold an manage property for the benefit of a beneficiary.

Will

A document that directs disposition of a person's property after death.

Will Contest

A legal proceeding challenging a will.

The guide and glossary are only offered to aid in understanding general probate administration and terminology, and is not intended, nor should any of the information be relied upon, as a substitute for legal advice. An experienced probate attorney should always be consulted for particular probate questions. Please refer to the California Probate Code for more precise definitions in this glossary.