You may have had some experience with probate, perhaps as a beneficiary or even someone who has served as a personal representative.
If not, the probate process may seem confusing at best. What is the process and what happens regarding a decedent’s assets?
About the process
The purpose of the probate process is to settle the estate of a deceased person according to the instructions in his or her will. The estate consists of the assets held in the name of the deceased at the time of death. The will names the executor in charge of winding up the decedent’s affairs and distributing the assets to beneficiaries.
Not subject to probate
Usually accounts with named beneficiaries such as an IRA or 401(k) will not be subject to probate. The funds in those accounts will go directly to the persons named. The same holds true for investment accounts with transfer on death or TOD designations. Assets placed in trusts and insurance policy proceeds avoid probate as well.
Subject to probate
Assets that must go through probate include cash accounts, personal property including items of value, real estate, assets held as tenants in common and accounts that are missing named beneficiaries.
Delays and costs
The probate process can take months and, in some cases, one to two years. The distribution of assets is therefore delayed as opposed to the transfer of funds in accounts with named beneficiaries. Costs depend upon the size and complexity of the process and may include court fees, account fees, appraisal and valuation fees. An executor will normally communicate with beneficiaries at intervals to keep everyone updated on probate progress.