Probate is the way a person’s affairs are settled. The phrase “nothing is certain but death and taxes” could use an amendment: nothing is certain except that when you die, your estate will go through probate, where you will pay your taxes! That’s because your estate will still go through the probate courts regardless of whether you have a Will or not. However, the difference between having a Will and dying without one can cost your heirs money and time.
When a person dies intestate, without a Will, the courts must appoint a personal representative to oversee the probate process. When a person has a Will, the court will appoint their chosen executor to oversee probate. Although it’s tempting to view this as a distinction without a difference, in reality, having an executor makes a big difference in how quickly and orderly an estate can be settled.
To see how lacking a Will can make the probate process messy and expensive, let’s take a look at the case of rock star Prince.
Price Dies Without a Will; Probate Takes Years
When Prince Rogers Nelson, better known to the world as Prince, died suddenly at age 57, it left his musical legacy and estate in chaos. Prince did not have a Will, yet his estate is conservatively valued at $200,000,000. Prince didn’t have any living children and was not married. This set off a competition between his six siblings over who would be permitted to act as his personal representative.
Shortly after Prince died, one of his sisters petitioned the probate court to appoint a special administrator, rather than naming a family member, at least on a temporary basis. The court appointed a temporary administrator, Bremer Trust, to begin the process of identifying heirs. This was an inflection point that slowed down the process considerably, since anyone claiming to be related to Prince would need to file with the court and then wait to be adjudicated. Eventually, Comerica Bank was named personal representative, but four years after the probate process opened, the siblings still hadn’t received any disbursements. Three of the siblings then sued the administrator.
It took six years for the Prince estate to settle and Comerica Bank would end up getting more than $3 million in fees. Prince was a notorious control freak when it came to his business and music. Reportedly he had once had a bad experience with a lawyer and was, therefore, reluctant to do an estate plan. But Prince should have at least done a DIY Will, especially since he had the foresight to turn his back on record companies and invest personally in digital music distribution, a decision that made him tens of millions of dollars in the long run. Unfortunately, he didn’t make a similar step that would have ensured he had control over his music for decades to come.
The Steps in Probate When You Have a Will or Die Intestate
The process of probating a will typically involves several steps. While the exact steps and requirements vary depending on the jurisdiction, and changes if you die without a Will, here is a general outline of the probate process:
Step 1. Filing the Petition:
The first step is to file a petition with the appropriate probate court to initiate the probate process. The petition usually includes the original Will, a death certificate, and other required documents.
Step 2. Notifying Interested Parties:
After filing the petition, the court will require the executor named in the Will or the person seeking to be appointed as the executor to notify all interested parties, such as beneficiaries and heirs, about the probate proceedings. This is typically done through formal notice by mail or publication.
Step 3. Appointment of Executor or Personal Representative:
The court will review the petition and, if everything is in order, appoint an executor or personal representative. This individual will be responsible for managing the estate during the probate process. If the Will names an executor, that person will most likely be appointed by the court, as long as they are not unwilling or unable to serve.
When there is not a Will, then the court will appoint a personal representative rather than an executor. Some states are fairly vague about who takes priority. For example, in Florida it goes like this:
1. The surviving spouse.
2. The person selected by a majority in interest of the heirs.
3. The heir nearest in degree. If more than one applies, the court may select the one best qualified.
(See §733.301(1)(b), Fla. Stat. for the complete statute)
Other states have a more detailed hierarchy for who can be appointed the personal representative.
In California, this is the order of priority:
(a) Surviving spouse or domestic partner as defined in Section 37.
(b) Children.
(c) Grandchildren.
(d) Other issue.
(e) Parents.
(f) Brothers and sisters.
(g) Issue of brothers and sisters.
(h) Grandparents.
(i) Issue of grandparents.
(j) Children of a predeceased spouse or domestic partner.
(k) Other issue of a predeceased spouse or domestic partner.
(l) Other next of kin.
(m) Parents of a predeceased spouse or domestic partner.
(n) Issue of parents of a predeceased spouse or domestic partner.
(o) Conservator or guardian of the estate acting in that capacity at the time of death who has filed a first account and is not acting as conservator or guardian for any other person.
(p) Public administrator.
(q) Creditors.
(r) Any other person.
(See §§8461-8469 of the California Probate Code for more information.)
Step 4. Inventory and Appraisal:
The executor must compile an inventory of all the assets and debts of the deceased person. This includes bank accounts, investments, real estate, personal property, and any outstanding debts. In some cases, the court may require a professional appraisal of certain assets.
Step 5. Notifying Creditors and Paying Debts:
The executor must notify creditors of the deceased person's passing and the probate proceedings. They will review and evaluate any claims made by creditors and pay off valid debts from the estate's assets.
Step 6. Distribution of Assets:
After the deceased person’s debts, taxes and expenses are paid out, the rest of the person’s assets will be distributed to the beneficiaries according to the terms of the Will. If there is no Will, the distribution will follow the laws of intestacy of the specific jurisdiction.
Step 7. Final Accounting and Closing the Estate:
The executor will make a last accounting of all financial transactions and distributions the executor authorized during the probate process. This accounting must be submitted to the court for final approval. If the court approves the accounting, the deceased person’s estate can be closed, and the probate process is completed.
The best way to protect your loved ones and ensure a smooth transition during probate is to have a valid Will. You can write your own online Will using FastWill.
