When Does An Estate Require Probate? Navigating Difficult Concepts in Difficult Times

One of the first obstacles which must be tackled in determining when an estate needs to be probated, is understanding the basic terminology associated with estate planning. Probate is simply the system of supervision provided by the court for distributing the decedent’s property at death.  Paramount in understanding the functions of probate, is understanding that each state has its own probate laws.  Some states follow the Uniform Probate Code (UPC), and some follow derivatives of common law.  The information shared here is not intended to substitute actual research of your state’s laws concerning probate, but is instead intended to give a general idea of how things work with probating an estate. The need to probate changes depending on whether or not a person dies with a will (testate) or without a will (intestate).  The person who has passed is often referred to as a decedent or testator if they had a will.

In certain circumstances, probate can be avoided based on the plans the decedent makes while they were still alive.  In these situations, assets can be passed at death to a beneficiary which was designated prior to death.  These measures are referred to as will substitutes, and commonly include devices such as life insurance policies, joint banking and brokerage accounts, joint tenancies in real estate, trusts, and other pay-on-death or transfer-on death designations.

In the absence of a will substitute, probate will generally be necessary for all real property (land, houses, permanently placed things, etc), and some personal property (tangible stuff you can move) if it is particularly valuable.  If the person has left a will, probate will be a very general and lenient supervision of the carrying out of the decedent’s wishes according to the terms of the will.  When there is no will, probate includes an inventory of the property both real and personal, and a greater role by the court and the personal representative.

Regardless of whether a person dies testate or intestate, an organization of their property has to occur.  This organization includes an inventory of their assets and liabilities, as well as a list of the people in their lives who may be future recipients or beneficiaries of their property. A will is nothing more than taking care of this organization before death, and providing some instruction for how the decedent would like their assets distributed.  In cases where there is no will, the same basic things must happen, but without a will, a larger share of the burden will be placed on the court, and the personal representatives than in cases where a person has left a will.

When a person dies and their assets are submitted for probate, a personal representative is appointed to oversee the winding up of their affairs.  The personal representative can be chosen by the court in cases where the decedent dies intestate, or the personal representative can be named in a will by the decedent.  Either way, on some level, the court will hold the personal representative responsible for what is known as a fiduciary duty-that is, the duty to act in the interest of another person above one’s own interests.

For example, John Doe has passed away, and in John’s will, he named his dear friend Bill as his personal representative.  In acting on whatever responsibility the court vested in him as a personal representative, Bill will be expected to act in the best interest of the beneficiaries of John’s estate, even when that interest conflicts with his own beliefs or his own interest, because as a personal representative, Bill owes John’s estate a fiduciary duty, and very serious issues arise for the breach of those duties.  Bill, if he were to be found to have breached his fiduciary duties, could find himself being held personally liable to John’s beneficiaries for mishandling the estate’s assets.

Regardless of whether a person dies testate or intestate, the court will likely be involved on some level whether it be formally or informally.  If a person has been named as a personal representative, they should see it as an honor and not a burden, even though it can feel as though it is burdensome at times. The truth though is that either the decedent felt compelled to place a certain amount of confidence and trust in the person they named to care for their affairs, or in the case of an intestate decedent, the court felt compelled to do so.  Either way, acting with integrity and in the best interest of the estate and the beneficiaries of the estate will allow the personal representative to feel as if they did their best to insure that the decadent’s affairs were cared for as well as possible.

For further information, please contact Temmerman, Cilley & Kohlmann, LLP, at 925-233-4399 or 408-290-7210.