Probate is primarily a process through which title is transferred from the name of the deceased to the names of the beneficiaries.
Certain types of assets, “non-probate assets,” do not go through probate. These include:
- Property in which you own title as “joint tenants with right of survivorship.” Such property passes to the co-owners by operation of law and do not go through probate.
- Retirement accounts such as IRA and 401(k) accounts where there are designated beneficiaries.
- Life insurance policies.
- Bank accounts with “pay on death” (POD) designations or “in trust for” designations.
- Property owned by a living trust. Legal title to such property passes to successor trustees without having to go through probate.
Executors are reimbursed for all legitimate out-of-pocket expenses incurred in the process of management and distribution of the deceased estate. In addition, you may be entitled to statutory fees, which vary from location to location and on the size of the probate estate. The Executor has to fulfill his or her fiduciary duties on behalf of the estate with the highest degree of integrity and can be held liable for mismanagement of estate assets in his or her care. It is advised that the Executor retain an attorney and an accountant to advise and assist him with his or her duties.
The cost and duration of probate can vary substantially depending on a number of factors such as the value and complexity of the estate, the existence of a Will, and the location of real property owned by the estate. Will contests or disputes with alleged creditors over the debts of the estate can also add significant cost and delay.
Common expenses of an estate include executors’ fees, attorneys’ fees, accounting fees, court fees, appraisal costs, and surety bonds. These typically add up to 2% to 7% of the total estate value. Most estates are settled though Probate in about 9 to 18 months, assuming there is no litigation involved.