What is probate?
Probate is the official way that an estate gets settled under the supervision of the court. A person, usually a surviving spouse or an adult child, is appointed by the court if there is no will, or nominated by the deceased person’s will. Once appointed, this person, called an executor, has the legal authority to gather and value the assets owned by the estate, to pay bills and taxes, and ultimately, to distribute the assets to the heirs or beneficiaries.
- What Assistance Do You Provide To Clients Going Through Probate?
- What Factors Set The Stage For Probate To Happen?
- What Are The Costs Associated With The Probate Process?
What Is the Purpose Of Probate?
The purpose of probate is to prevent fraud after someone’s death. It is a way to freeze the estate until a judge determines that the will is valid, all the relevant people have been notified, all the property in the estate has been identified and appraised, the creditors have been paid and all the taxes have been paid. Once all that has been done, the court issues an order distributing the property and the estate is closed.
In Tennessee, property does not have to go through probate if it:
- Is considered a “small estate”
If an estate falls below a certain threshold, it is considered a “small estate” and does not require court supervision to be settled.
- Is secured in a living trust
If a decedent created a living trust to hold his or her largest assets, then that estate won’t go through probate, unless the assets left outside of the trust add up to more than Tennessee’s small estate limit.
- Is jointly owned, with survivorship rights in place
When one joint tenant dies, the surviving joint tenant becomes the owner of the entire asset, without the need for a court order. This is called “right of survivorship.”
- Includes a transfer-on-death or payable-on-death accounts
Bank and brokerage accounts can have designated beneficiaries. The account owner can fill out forms to designate who should receive the account assets after their death.
The general procedures required to settle an estate via probate in Tennessee are the following:
- The will must be filed with the probate court in the county where the decedent lived.
- A Petition for Probate must be filed with the probate court as well. This requests the appointment of an executor. If there is no will, the court will appoint someone to serve as the personal representative of the estate. Notice must be given to all heirs and beneficiaries, as required by the court.
- The court will issue “Letters Testamentary” to the executor/personal representative, this gives the executor legal authority to act on behalf of the estate.
- Publication of the probate must be published where the decedent lived. Creditors have four months after the date of publication to make a claim.
- An inventory of the estate’s assets must be filed with the court listing the estate’s assets within 60 days.
- Once all of the creditors and taxes have been paid, a petition to close the probate must be filed with the court. Executors must file a Request for Relief with TennCare, proof that the agency won’t seek reimbursement for medical costs.
- The court will issue an order, distributing the estate’s property to the beneficiaries.
- The executor is entitled to reasonable fees for their services based on the size and complexity of the estate, but since such fees are subject to income tax (which inheritances aren’t), many executors forgo the fees.
As you can see, settling an estate through probate can be lengthy, costly and confusing. However, a good attorney can walk you through the probate process from start to finish in a timely manner. If you would like to avoid the probate process altogether, call to schedule an appointment with Justin M. Gilbert to discuss drafting a trust.