What Is Probate Court?

Probate court is a part of the court system that oversees the execution of wills, as well as the handling of estates, conservatorships and guardianships. This court also is responsible for the commitment of a person with psychiatric disabilities to institutions designed to help them.

Investopedia’s recent article entitled “What Is Probate Court?” also explains that the probate court makes sure all debts owed are paid and that assets are distributed properly. The court oversees and usually must approve the actions of the executor appointed to handle these matters. If a will is contested, the probate court is responsible for ruling on the authenticity of the document and the cognitive stability of the person who signed it. If no will exists, the court also decides who receives the decedent’s assets, based on the laws of the state.

Each state has rules for probate and probate courts. Some states use the term “surrogate’s court”, “orphan’s court”, or “chancery court.”

Probate is usually required for property titled only in the name of the person who passes away. For example, this might include a family home that was owned jointly by a married couple after the surviving spouse dies. However, there are assets that don’t require probate.

Here are some of the assets that don’t need to be probated:

IRA or 401(k) retirement accounts with designated beneficiaries
Life insurance policies with designated beneficiaries
Pension plan distributions
Living trust assets
Payable-on-death (POD) bank account funds
Transfer-on-death (TOD) assets
Wages, salary, or commissions owed to the deceased (up to allowable limit)
Vehicles intended for immediate family (under state law); and
Household goods and other items intended for immediate family (under state law).

Investopedia (Sep. 21, 2022) “What Is Probate Court?”

What Should I Know About Probate Costs?

The cost of probate depends on several factors. One of the most important is the state where the decedent lived. The cost of probate varies from state to state, depending on the general cost of living in the state and state probate laws. Other factors also impact the cost of probate.

Nasdaq.com’s recent article entitled “How Much Does Probate Cost?” provides a breakdown of fees associated with probate. The process of probating an estate will settle the estate after the decedent’s death and following their last will and testament. It’s also used for those who die without a will or intestate. Assets owned only by the decedent are usually addressed in the will and are distributed according to the decedent’s wishes. An executor is usually named in the will, and an administrator of the estate is appointed in the case of a decedent dying intestate. The executor takes an inventory of the decedent’s assets, pays the decedent’s outstanding debts and presents the inventoried estate to the court for settlement. If there are no objections to the will, the estate is closed. If there are objections, the probate judge is responsible for settling them. The longer the probate process drags on, the more expensive it will be.

Probate can be a time-consuming process. A modest estate may take six to 24 months to settle. Larger estates can take even longer, if they’re complex. It also necessary to add in more time if the will’s contested or beneficiaries can’t be found. The longer the process, the more expensive it becomes. Probate costs in 2021 run about 3% to 8% of the value of the estate. Let’s look at the key costs of probate:

Court Costs. This includes filing fees. Some states require the same filing fee for all estates, while others have a graduated scale depending on the size and complexity of the estate. The more complex the estate, the higher the court costs.

Executor Costs. The executor of a will is typically paid at least a nominal fee. Fees are mandated by state law, unless the decedent specifies in his or her will what the executor should be paid. Some states permit a flat and “reasonable” fee which may be determined by the court. Other states require a graduated fee, such as a certain percent of the estate for the first $100,000 and so on. If the will doesn’t state the executor’s fee or if the decedent dies intestate, the court determines the executor’s fee.

Accounting Fees. Accounting costs can be high with more complex estates. If the decedent has complicated business affairs to sort out or owns many stocks and other securities, the complexity will require higher accounting fees. The accountant will also have to file federal and state taxes in the form of a final return.

Attorney Fees. When the executor believes an attorney is needed, the attorney is paid out of the estate. Attorney’s fees can be state-mandated, determined by the court, or set by the attorney depending on the anticipated workload.

Estate Administration Fees. The executor will often incur significant costs of administering the estate, such as property appraisals, and a real estate agent may have to be hired and paid to dispose of property or businesses. A property may also have to be managed until it’s sold or the estate is closed.

Reference: Nasdaq.com (Feb. 2, 2023) “How Much Does Probate Cost?”

Why Is a Will So Important?

A 2020 Gallup poll found that less than half of Americans have a will or have made plans regarding how they would like their money and estate handled in the case of their death. The poll also showed that Americans ages 65 and up are the most likely to have a will.

Yahoo News’ recent article entitled “How To Write A Will: The Importance Of A Will And Living Will” says that no matter your age, it’s important to have a will to be in control of what happens with your own assets. A will is a legal document that establishes a person’s wishes regarding the distribution of their assets — money, real estate, etc. — and the care of any minor children.

Without a will, state law may control who gets your “probate” assets and when. Having a will can save an enormous amount of time and money in estate administration and the process of having a guardian appointed for your minor children, if needed.

There’s a big difference between a will and a living will. A living will is a document that lets you state in advance how you want to be treated under certain medical situations, if you’re unable to make those decisions for yourself at a later time.

These differ by state law. However, they generally cover end-of-life decision-making and treatment options. General medical decisions unrelated to end of life care are typically covered in a health care power of attorney. Some states combine these two documents into one directive.

Unlike a living will, which specifically provides instructions for medical care during your lifetime, a will lets you to decide in advance who you want to receive your assets upon your death, and who you want to be in charge of handling the administration of your estate. If you have minor children, a will also allows you to nominate a guardian for them.

When creating a will, think about the “what,” the “who” and the “how.” To do so, ask yourself the following questions:

What assets do you have?
To whom do you want to leave them?
Who do you want to be in charge of making sure that happens?
Who do you want to be responsible for your minor children?
How do you want the assets transferred?

Reference: Yahoo News (Aug. 17, 2022) “How To Write A Will: The Importance Of A Will And Living Will”

When Should I Hire an Estate Planning Attorney?

Kiplinger’s recent article entitled “Should I Hire an Estate Planning Attorney Now That I Am a Widow?” describes some situations where an experienced estate planning attorney is really required:

Estates with many types of complicated assets. Hiring an experienced estate planning attorney is a must for more complicated estates. These are estates with multiple investments, numerous assets, cryptocurrency, hedge funds, private equity, or a business. Some estates also include significant real estate, including vacation homes, commercial properties and timeshares. Managing, appraising and selling a business, real estate and complex investments are all jobs that require some expertise and experience. In addition, valuing private equity investments and certain hedge funds is also not straightforward and can require the services of an expert.

The estate might owe federal or state estate tax. In some estates, there are time-sensitive decisions that require somewhat immediate attention. Even if all assets were held jointly and court involvement is unnecessary, hiring a knowledgeable trust and estate lawyer may have real tax benefits. There are many planning strategies from which testators and their heirs can benefit. For example, the will or an estate tax return may need to be filed to transfer the deceased spouse’s unused Federal Estate Unified Tax Credit to the surviving spouse. The decision whether to transfer to an unused unified tax credit to the surviving spouse is not obvious and requires guidance from an experienced estate planning attorney.

Many states also impose their own estate taxes, and many of these states impose taxes on an estate valued at $1 million or more. Therefore, when you add the value of a home, investments and life insurance proceeds, many Americans will find themselves on the wrong side of the state exemption and owe estate taxes.

The family is fighting. Family disputes often emerge after the death of a parent. It’s stressful, and emotions run high. No one is really operating at their best. If unhappy family members want to contest the will or are threatening a lawsuit, you’ll also need guidance from an experienced estate planning attorney. These fights can result in time-intensive and costly lawsuits. The sooner you get legal advice from a probate attorney, the better chance you have of avoiding this.

Complicated beneficiary plans. Some wills have tricky beneficiary designations that leave assets to one child but nothing to another. Others could include charitable bequests or leave assets to many beneficiaries.

Talk to an experienced attorney, whose primary focus is estate and trust law.

Reference: Kiplinger (July 5, 2022) “Should I Hire an Estate Planning Attorney Now That I Am a Widow?”

When Should I Revise My Will?

Just as your life changes, so should your will. You may need to replace an executor, update accounts, or adjust heirs. If you have an estate plan with greater wealth or need more complex arrangements, such as trusts or guardianship provisions, may want to work with an experienced estate planning attorney, says US News’ March 2018 article entitled “4 Times It Makes Sense to Revise Your Will.” Let’s look at the four events:

You’ve experienced a significant life event. This may be a marriage, a divorce, the birth of a child, remarriage or the death of a loved one. These changes may require that new heirs be added to a will or others removed. These life events may also influence how assets are divided in the will. In addition, if you move to a new state, update your will to ensure it adheres to the laws there.
A person in your will has experienced a significant life event. Wills also include executors, trustees and guardians. These individuals may move, get married or become sick or disabled, all of which could change whether they are appropriate for the role listed in your will.
The tax laws have changed. A will may be written to minimize the effects of estate taxes. When laws change, the provisions of the will may need to be updated. For example, in 2017, $5.49 million of a person’s estate was exempt from the 40% federal estate tax. Under the Tax Cuts and Jobs Act, $12.06 million of an estate is currently exempt from the tax in 2022. This could mean that some families no longer need to worry about paying an estate tax and could eliminate the need for some trusts or other provisions in a will.
If it’s been three to five years. It’s smart to review a will at least every three to five years and ensure that all provisions are still in line with your wishes.

While you’re reviewing your will, don’t forget to also review beneficiaries on bank accounts, retirement funds and life insurance. Remember that a named beneficiary trumps the will.

Make sure that all that hard work on your will does not go to waste, by reviewing and updating the document periodically to make sure it reflects the changing landscape of your life.

When you have the will updated, be sure to store it in a secure location, like a fire-proof safe, and let your executor know where to find it. If an attorney drew up your will, they’ll be happy to store at least a digital copy for you.

Reference: US News (March 30, 2018) “4 Times It Makes Sense to Revise Your Will”

How Do I Conduct an Estate Inventory?

When a loved one dies, it may be necessary for their estate to go through probate—a court-supervised process in which his or her estate is settled, outstanding debts are paid and assets are distributed to the deceased person’s heirs. An executor is tasked with overseeing the probate process. An important task for an executor is submitting a detailed inventory of the estate to the probate court.

Yahoo Finance’s recent article entitled “What Is Included in an Estate Inventory?” looks at the estate inventory. During probate, the executor is charged with several duties, including collecting assets, estimating the fair market value of all assets in the estate, ascertaining the ownership status of each asset and liquidating assets to pay off outstanding debts, if needed. The probate court will need to see an inventory of the estate’s assets before distributing those assets to the deceased’s heirs.

An estate inventory includes all the assets of an estate belonging to the individual who’s passed away. It can also include a listing of the person’s liabilities or debts. In terms of assets, this would include:

Bank accounts, checking accounts, savings accounts, money market accounts and CDs
Investment accounts
Business interests
Real estate
Pension plans and workplace retirement accounts, such as 401(k)s, 403(b)s and 457 plans
Life insurance, disability insurance, annuities and long-term care insurance
Intellectual property, such as copyrights, trademarks and patents
Household items
Personal effects; and

Here’s what’s included in an estate inventory on the liabilities side:

Home mortgages;
Outstanding business loans, personal loans and private student loans;
Auto loans associated with a vehicle included on the asset side of the inventory
Credit cards and open lines of credit
Any unpaid medical bills
Unpaid taxes; and
Any other outstanding debts, including unpaid court judgments.

There is usually no asset or liability that’s too small to be included in the estate inventory.

Reference: Yahoo Finance (Feb. 15, 2022) “What Is Included in an Estate Inventory?”

Why Shouldn’t I Wait to Draft my Will?

There are countless reasons why people 50 and over fail to write a will, update a previous one, or make other estate planning decisions. Market Watch’s recent article entitled “We beat up 6 of your excuses for not writing a will (or updating an old one)” takes a closer look at those six reasons, and how to help overcome them.

Excuse No. 1: You have plenty of time. Sure, you know you need to do it. However, it’s an easy thing to move down on your priority list. We all believe we have time and that we’ll live to be 100. However, that’s not always the case. Set up an appointment with an experienced estate planning lawyer ASAP because what gets scheduled gets done.

Excuse No. 2: You don’t have a lot of money. Some think they have to have a certain amount of assets before estate planning matters. That isn’t true. Drafting these documents is much more than assigning your assets to your heirs: it also includes end-of-life decisions and deciding who would step in, if you were unable to make financial decisions yourself. It’s also wise to have up-to-date documents like a power of attorney and a living will in case you can’t make decisions for yourself.

Excuse No. 3: You don’t want to think about your death. This is a job that does require some time and energy. However, think about what could happen without an up-to-date estate plan. Older people have seen it personally, having had friends pass without a will and seeing the children fighting over their inheritance.

Excuse No. 4: It takes too much time. There’s a misconception about how time-consuming writing a will is. However, it really can be a fairly quick process. It can take as little as 2½ hours. First, plan on an hour to meet with the lawyer; an hour to review the draft; and a half-hour to sign and execute your documents. That is not a hard-and-fast time requirement. However, it is a fair estimate.

Excuse No. 5: You’d rather avoid making difficult decisions. People get concerned about how to divide their estate and aren’t sure to whom they should leave it. While making some decisions in your estate plan may seem final, you can always review your choices another time.

Excuse No. 6: You don’t want to pay an attorney. See this as investment in your loved ones’ futures. Working with an experienced estate planning attorney helps you uncover and address the issues you don’t even know you have. Maybe you don’t want your children to fight. However, there can be other issues. After all, you didn’t go to law school to learn the details of estate planning.

Reference: Market Watch (March 12, 2022) “We beat up 6 of your excuses for not writing a will (or updating an old one)”

Why Is Estate Planning Review Important?

Maybe your estate plan was created when you were single, and there have been some significant changes in your life. Perhaps you got married or divorced.

You also may now be on better terms with children with whom you were once estranged.

Tax and estate laws can also change over time, requiring further updates to your planning documents.

WMUR’s recent article entitled “The ‘final’ estate-planning step” reminds us that change is a constant thing. With that in mind, here are some key indicators that a review is in order.

The value of your estate has changed dramatically
You or your spouse changed jobs
Changes to your income level or income needs
You are retiring and no longer working
There is a divorce or marriage in your family
There is a new child or grandchild
There is a death in the family
You (or a close family member) have become ill or incapacitated
Your parents have become dependent on you
You have formed, purchased, or sold a business;
You make significant financial transactions, such as substantial gifts, borrowing or lending money, or purchasing, leasing, or selling assets or investments
You have moved
You have purchased a vacation home or other property in another state
A designated trustee, executor, or guardian dies or changes his or her mind about serving; and
You are making changes in your insurance coverage.

Reference: WMUR (Feb. 3, 2022) “The ‘final’ estate-planning step”

What Can’t I Forget in My Will Now that I’m 50?

Yahoo News’ recent article entitled “If You’re Over 50, Don’t Leave This Out of Your Will, Expert Says” fills us in on what we can’t forget in a will after the big 5-0.

Incapacity. A 2021 survey from Caring.com says that almost two-thirds of adults do not have a will. Even those thinking about estate planning do not consider a plan for addressing the possibility of incapacity.

Ask an experienced estate planning attorney to create a power of attorney, so in the event you are incapable of making decisions because of your mental state or disability, you have someone you trust doing it for you.

More than a will. A will should be one component of a comprehensive estate plan that addresses who gets what when you die, but also who can take care of business, if you are not able to care for yourself. Naming a person in advance lets you to avoid having court involvement and lets you take control of your future.

The law has many ways for you to select who will have authority and care for you, if you become incapacitated. This is something that you can and should discuss with an experienced estate planning attorney.

Will backups. Designating loved ones you trust should be the rule in all facets of estate planning. However, it is critical to be certain that you have backups (“successors” or “alternates”), in the event that a person you’ve selected can’t fulfill their role.

Many people around age 50 who see their thriving, productive children making their way in the world fail to consider the thought that their children may not be available or able to serve a role. Designating more than one backup might not seem like it is a big deal, but you should consider the possibility that a loved one might be incapacitated, predecease you, or be unavailable.

Keep your will current. As your life changes, so do your needs. Therefore, it is vital to be sure that your will is up-to-date. You should review your will regularly (at least every few years) to make sure that it still reflects your current thinking.

You should also be sure you know where an original copy of the will is located. It is important to keep track of it. You can leave it locked away with your attorney or some other secure place, but you need to know where it is.

Reference: Yahoo News (Feb. 6, 2022) “If You’re Over 50, Don’t Leave This Out of Your Will, Expert Says”

How Do I Write My Will?

Remember that if you don’t write your will correctly, your wishes could end up going unfulfilled, says Claremont Portside’s article entitled “A Guide for Writing Your Will: Steps You Need to Take.”

While there are a lot of tools online, your best bet is working with an experienced estate planning attorney.

Schedule a meeting with an estate planning attorney to discuss your final wishes. The process of writing a will is relatively straightforward:

Decide who you want to inherit your assets
Remember to include your favorite charities, if you want
Note if any of your heirs has special needs or requires extra planning (e.g., if they’re not good with money)
Note if you have minor children who will need a guardian and can’t inherit outright at their age
List the specific items or assets you want each person to inherit
List any debts or liabilities
Designate an executor or personal representative
Determine how your estate should be managed, until it is distributed; and
Ask your attorney about tax implications.

Once prepared, retain a copy in a safe place and make copies for your executor, your spouse or partner, children older than 18 years old and any other heirs who live in another state.

When you begin this process, create a list of what you own and how much it’s worth. This can help ensure that your estate is distributed according to your wishes.

The executor of your will is responsible for ensuring that everything goes according to plan, so choose someone you trust.

Reference: Claremont Portside “A Guide for Writing Your Will: Steps You Need to Take”

Estate Planning Blog Articles

Estate & Business Planning Law Firm Serving the Providence & Cranston, RI Areas

What Is Probate Court?

What Should I Know About Probate Costs?

Why Is a Will So Important?

When Should I Hire an Estate Planning Attorney?

When Should I Revise My Will?

How Do I Conduct an Estate Inventory?

Why Shouldn’t I Wait to Draft my Will?

Why Is Estate Planning Review Important?

What Can’t I Forget in My Will Now that I’m 50?

How Do I Write My Will?

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What Is Probate Court?

What Should I Know About Probate Costs?

Why Is a Will So Important?

When Should I Hire an Estate Planning Attorney?

When Should I Revise My Will?

How Do I Conduct an Estate Inventory?

Why Shouldn’t I Wait to Draft my Will?

Why Is Estate Planning Review Important?

What Can’t I Forget in My Will Now that I’m 50?

How Do I Write My Will?

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