Probate is a court-supervised process for validating a deceased person’s will and appointing someone to administer the estate, or deal with all the assets and debt left behind by the deceased. Once the court determines the will is valid, the court permits the executor to execute the will and administer the estate. When there is no will, the next-of-kin or another individual can apply to be authorized by the court to take on this role.
Ultimately, the probate court will appoint someone to take control of the assets, pay debts and taxes, and distribute what remains in the estate to the beneficiaries. Many estates can’t be wrapped up until the court has issued a document that says who will be in charge of administering the estate.
Probate is mostly a lot of paperwork. Although it is officially a court-supervised process for administering the estate, there is usually not very much oversight from the court unless there are disputes between family members or creditors.
Letters Probate confirms the appointment of the estate representative (referred to as executor, estate trustee with a will, personal representative, or liquidator depending on the province) to administer the estate, as laid out in the will.
How does probate work?
While every state and province has its own legal probate process and terminology, the process generally stays the same. After the death, the person named as executor in the will (or if there is no will, the person wanting to act as person representative) initiates the proceeding with the local probate court. They do this by filing a court application. The paperwork required is dependent on your location and court.
If there is a will, the named executor will present it to the courts to ensure it is valid. For example, the court will make sure the deceased actually wrote the will, that they were in the right mental state, and that they followed local laws. If the will is validated and the request is approved, the court will officially appoint the executor(s). When there is no will and a probate application is made, the court will appoint another individual to take on the role of the estate representative. In this situation, this individual is usually called the Administrator. See here for more on this process.
The appointed estate representative will be given a “Grant of Administration,” which is also called a “Grant of Letters Probate,” or a “Certificate of Appointment of Estate Trustee With or Without a Will.” These documents authorize the estate representative to take control of the assets, pay debts and taxes on behalf of the estate, and distribute assets to beneficiaries. Institutions like banks, land title and motor vehicle offices, insurance companies, and credit bureaus may ask for this document.
As part of the probate process, the Executor will probably be required to provide the court with a list of the beneficiaries listed in the will as well as all the financial assets, property, and debts that make up the estate. They will also be required to notify the beneficiaries and, in some cases, potential creditors that the estate is in probate so they can come forward. The executor may be required to post a bond—which is a kind of insurance policy that protects the estate from losses. The probate court will tell you if this is required.
How much does probate cost?
It is important to note that there are fees involved with the probate process. Although the costs are paid out of the assets in the estate, the more you need to pay, the less inheritance the beneficiaries will receive. Costs vary by situation and by location, but they can include:
Probate fees/estate administration tax (vary depending on the size of the estate)
Professional fees to pay attorneys or accountants
Executor fees
Bond fees
Other miscellaneous fees such as postage, notaries, appraisals & valuations, etc.
Do you need to go through probate?
It is important to note that not all estates must go through probate. Some people choose to apply even if it is not required. Applying for probate reduces potential liability and the chance of a claim being brought against the estate or the estate representative.
When Probate Is Required
Probate is most likely required if you answer yes to any of the following:
There is property in the name of the deceased alone (e.g. house, cabin, mineral rights, land, etc.)
The bank or other 3rd party requested it to release funds
There are minor beneficiaries
The deceased owned stocks, bonds, or shares in a public company
“The estate” was the named beneficiary on an insurance policy
There is a lawsuit relating to the estate
When Probate Isn’t Required
Letters Probate are not always required to settle an estate. Probate may not be required if:
There is no property in the estate
Property or accounts are jointly held and will transfer directly to the surviving owner
You do not require access to financial institutions (banks, investments, etc.)
The value of the estate is small
To clarify, you can determine if the estate's value is small by reviewing the local requirements for estates that do not require probate.
You can always check with the bank (or other third party that is holding the assets) to see if they will release the money without probate.
If you’d like to learn more about probate or have questions specific to your situation, Cadence is here to help. Our online platform provides guidance personalized to your location and situation, and human support from our Support Specialists is always just a click away.