When a person with a will dies, he or she leaves behind a legal document that will declare how the dispersal of the estate will be carried out. But if the individual dies without making a will, the dispersal of the estate can be a problem.
Unfortunately, when it comes to money, things never seem to be straightforward and disputes are very common among heirs when someone dies without a will; therefore, probate takes place.
In such scenarios, the dispersal of the estate will be handled by the probate court according to the laws of the state.
What Exactly is Probate?
In the simplest terms, when a person dies and does not leave a will, or has a will but the heirs dispute its validity, then probate has to take place.
- Probate is a legal or court-supervised process that includes the following:
- First identifies all the assets belonging to the deceased
- Next, a Personal Representative is selected to be in charge of the assets
- After the debtors and all liens have been paid, the rest of the money is dispersed to the heirs
For example, if the decedent did not have a will but left behind $1,000,000 in a bank account, then the court will decide on the dispersal. Before anyone gets any money, all liens or outstanding debts have to be paid, court costs have to be deducted, attorneys have to be reimbursed for their work. Only then is the rest of the money divided between the siblings, wife, other beneficiaries, etc., according to the judge’s decision.
Probate can be an expensive process because not only are there lawyer fees involved but there are other costs associated with it. At the end of the day, the government will also take its share as tax.
What do Probate Assets Include?
- All bank accounts, savings, safety deposit box content
- Life insurance policy, pension, Investments
- Real estate that is titled solely in the decedent’s name, or jointly with the spouse or another individual.
Types of Probate
In general, there are two types of probate administration: Formal Administration and Summary Administration. It is important to know the differences between the two types of probate because it will give you an idea of what is involved in the process and which may be a better option for you
- When there is a need to appoint a Personal Representative, Formal Administration is the required next step.
- In general, Formal Administration is a long process and also more expensive. There is usually greater involvement on the part of all parties.
- If the decedent had a significant amount of debt and/or creditors or if the estate is expected to go to court, Formal Administration is the usual course of action.
- Summary Administration is undertaken when the total value of the assets under probate is less than $75,000, or if the decedent has been dead for more than 24 months from the date of filing.
- For most heirs, even if eligible for Summary administration, this may not be the best option for probate as you have limited possibilities to undertake if any disagreements arise.
- For the most part, Summary Administration is a simpler and faster process compared to Formal Administration.
- With Summary administration, there is usually no need to appoint a personal representative. However, with Summary Administration, there is usually no one responsible for the debt and even the distribution of assets can be marked by arguments and disputes.
For most heirs, the type of probate process that one may require will depend on the circumstances and the value of the estate.
The goal of probate is to ensure the decedent’s will is adhered to and the assets divided fairly according to the law. Unfortunately, probate can be extremely complex and challenging for the Personal Representative and/or heirs.
Probate is associated with costs, payment of taxes, resolving all the liens and debts, and resolving disputes between the heirs on asset distribution. To have a better understanding of which probate process may be the best for you, you need to consult with a probate lawyer who can provide more specific knowledge after evaluating your case.
Contact Elder Law, P.A, focused on Florida Probate cases, contact us today.