Navigating the Murky Waters of Probate
Navigating the Murky Waters of Probate
By Steven A. Tingey, JD
Have you been named as an executor in a will? If so, mentioning the word “probate” may be enough to make you lose your appetite.
As executor of an estate, your responsibilities include: notifying creditors of the deceased person’s passing; paying debts; filing taxes; handling the day-to-day affairs of the estate; determining the eligible heir to the estate; and distributing the estate as directed by the will. In addition to all of these responsibilities, you may also be required to navigate the murky waters of probate.
Probate is the first step of administering an estate under a will. It is through probate that an executor is officially appointed, all claims against the estate are resolved, and the assets of the estate are distributed.
One reason probate is such a dreaded process is because it generally involves formal legal proceedings. This means that probate provides an accessible forum for people to contest the will or argue about the distribution of the assets. To make things worse, probate proceedings are public record.
Another reason probate is so dreadful is that it can take a significant amount of time and require significant legal costs. Take Elvis Presley, the “King of Rock ‘n’ Roll,” as an example. Elvis left an estate of about $10 million. His probate cost was about $7 million, leaving only about 30% of his estate for his heirs.
How Does Probate Work?
The formal probate process begins when the executor files a petition for probate with the clerk of the probate court, along with a copy of the death certificate and the will. Once the petition has been received, the probate court sends a notice to each of the heirs listed in the petition and holds a hearing. After the hearing, the court appoints the executor and grants letters testamentary, which permit the executor to distribute the estate.
Before the executor distributes the estate, a notice to creditors must be published in the newspapers so that all debts can be settled. The executor must also prepare an inventory (sometimes called an “accounting”) of the estate.
The time and cost involved in probate depends on multiple factors, including the size of the estate, the type of property held by the estate, the number of heirs, and whether there are contests or disputes.
What’s the Good News?
A silver lining in all of this is that Utah is one of the states that provides an informal probate process for qualified applicants. (Utah Code § 75-3-301.) The informal probate process can be much simpler and quicker than formal probate, but don’t let the term “informal” mislead you. Informal probate still has its challenges.
Of course, the best way to deal with probate is to avoid it completely. A few ways that probate can be avoided include setting up and properly funding a revocable living trust, using “paid-on-death” or “transfer-on-death” designations with certain assets, holding property in joint tenancy with a spouse, or by gifting property while you are alive.
If you’ve been named as an executor in a will, try to familiarize yourself with the planning documents for that estate. By doing so you may be able to recommend steps to simplify the administration of the estate or even avoid probate altogether. You will also be better prepared to fulfill your role as executor.
Steven A. Tingey, JD
9980 S. 300 W. Ste. 140
Sandy, Utah 84707
(801)938-4035