Probate is the legal process through which a deceased person’s estate is settled. During the process, a person appointed in the deceased person’s will and confirmed by the court, known as a “personal representative,” steps into the deceased person’s shoes and winds up that person’s affairs. This means the personal representative inventories the deceased person’s property, pays debts and taxes, and distributes assets to heirs or beneficiaries.

A personal representative, sometimes known as an “executor,” or “administrator,” is a person entrusted with the duty to administer the estate of a deceased person in accordance with the law and the deceased’s will (if there is one). A personal representative is often named in a deceased person’s will or can be appointed by the court, if needed. Personal representatives owe certain fiduciary duties to the beneficiaries of the estate and are entitled to reasonable compensation for their efforts.

Probate assets are assets titled in the deceased person’s name, and which don’t have designated death beneficiaries. Nonprobate assets are (i) assets over which the deceased person has control or entitlement to, but which are not titled in the deceased person’s name, or (ii) assets held in the deceased person’s name with survivorship provisions or death beneficiary designations.    

Examples of probate assets include:

• Real property owned in the deceased person’s name or jointly owned without a “transfer on death deed” or similar survivorship status
• Bank and investment accounts that do not have “TOD” or “POD” beneficiaries or that are jointly owned without survivorship provisions
• Personal belongings
• Vehicles
• Business interests.

 Examples of nonprobate assets include:

• Assets held in a revocable trust
• Bank account that is payable on death to a spouse, child, or trustee
• Securities account that is transferable on death to a spouse, child, or trustee
• Any property held in joint tenancy with rights of survivorship
• Life insurance or annuities with designated beneficiaries
• Property subject to a community property agreement that is transferable to the surviving spouse
• IRA or 401(k) account with designated beneficiaries
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No, probate isn’t required for all estates. Whether a formal probate is necessary depends on the size and complexity of the estate, as well as how the deceased person’s assets were owned. If a decedent didn’t own “probate” assets, there would be no need for probate.

The length of probate usually depends on the assets involved, the value of the estate, the amount of work performed by the personal representative, the claims of creditors, whether or not there are disputes among heirs or beneficiaries, and whether or not a federal or state estate tax return must be filed. A simple probate can be completed within months and for more involved or complex estates, the probate process will usually require more than a year, and sometimes more than two years.

Yes, with proper planning. Probate can be avoided or simplified through estate planning strategies such as creating a revocable living trust, designating beneficiaries on accounts, and making use of joint ownership or transfer-on-death deeds for real estate.

When the person who created a revocable living trust dies, the process of “settling” that trust is commonly referred to as a “trust administration.”  Trust administration is similar to the probate process, and your role as trustee is similar to that of a personal representative.  Trust administration involves providing required notices and notifications, gathering and taking an inventory of the trust assets, paying debts and taxes, addressing creditor claims, filing income and estate tax returns as needed, completing an accounting for the trust, and distributing assets to heirs or beneficiaries—all in fulfillment of the terms of the trust agreement.

Tax reporting and obligations don’t end when a person dies. We counsel personal representatives and trustees on both income and estate tax reporting obligations. First, we determine whether a final individual income tax return must be filed for the deceased person, or, if the deceased person was married, how to maximize income tax reporting for the final joint tax return. We then determine whether a federal and/or state estate tax return must be filed, and this often involves strategizing tax saving opportunities for the beneficiaries. And finally, we determine whether an income tax return for the estate and/or trust must be filed or should be filed to maximize tax saving opportunities for the beneficiaries.