PROBATE
WHAT IS IT AND IS IT REALLY NECESSARY?
We often hear people say
that they don't want their estate to be tied up in probate court. There is a
popular television financial “advisor” who has made a great deal of money
preaching that listeners should avoid probate at all costs and that it is financially
unwise to permit their estates to go through probate. This is at the same time
that the “advisor” is selling “one-size-fits-all”/ “do-it-yourself” trust and
will kits. Given the prevalence of such views, it's important to have a
no-nonsense, down to earth discussion about what probate really is.
What is probate?
Probate is simply a legal procedure
to ensure that your wishes, as the author of your will, are honored. Similarly,
it is also a way that your rights, if you are the beneficiary or an heir of an
estate are protected. An impartial judge through court procedures supervises
this process, and an executor (if there is a will) or an administrator (if
there is no will) will be appointed by the judge to do the work necessary to
handle the affairs of the deceased person. The executor of administrator
usually designates an attorney to assist with the legal filings required in a
probate matter.
What is an estate?
Your estate is simply all
the assets you own and all of the debts that you owe on the day of your death.
This includes household goods, bank accounts, retirement accounts, motor
vehicles, and other personal property, but also real estate such as your home,
timeshares, oil and mineral rights, and other rights to real estate.
Do all estates have to be probated?
State law and probate rules
provide procedures for all levels of estates. In Iowa, unless there is real
estate, estates with the gross value of less than $50,000 can be probated
informally through an affidavit process. Estates between $50,000 and $100,000
are permitted to go through an expedited small estate procedure with a minimum
of supervision by the judge. Finally, estates with a value of over $100,000 are
required to go through a more formal and regulated probate procedure.
What will it cost me to probate the estate?
In most cases, it will not
cost the heirs or beneficiaries anything to have an estate probated. The fees,
court costs, and expenses come from the assets of the estate itself. In Iowa, for
estates with a value of over $100,000 the attorney’s fees will be approximately
2% of the gross value of the estate. If, however, the attorney is required to
provide assistance over and above what is normally required, then
“extraordinary fees” may be awarded. This type of situation could occur, for
example, if someone challenges the will or if complex real estate matters need
to be attended to. In estates valued at under $100,000, the attorney can charge
a reasonable fee based upon the attorney’s hourly rate. In most cases this will
be over 2% because much of the same work must be done as in a larger estate.
What if I die without a will, does my estate still
have to go through probate?
Yes, all estates must be
probated. The procedures are very similar both for an estate with a will and those
without a will. If there is a will, this is called a "testate
estate." If there is no will, then it is called an "intestate
estate." Unfortunately, however, because the deceased person has left no
direction for the court, the personal representative appointed by the court
will have much less flexibility and need more court approval for items than if
the deceased person had actually just left a will.
How long does it take to Probate a Will or an Estate?
In his book, Bleak House, about life in Victorian
England, British author Charles Dickens describes an estate that took
generations to work its way through the courts. Fortunately, that is not the
case in modern America. Although, there are circumstances such as when there
are appeals and disputes among the heirs, or people who believe that they
should be heirs that can give rise to a probate case taking many years, most
probate matters can be finished within one or two years. If it is a small
estate, then it is not unusual for it to be closed in a matter of months.
What if the deceased has a will, but did not want to
pay a lawyer to help write it?
All wills are carefully
scrutinized to ensure that Iowa law was followed relating to execution and
content of the wills. This is especially true when a will was executed without
legal guidance. Potential red flags in a will are the failure to acknowledge
children of the deceased, or execution irregularities. Examples of these are situations
where the will was witnessed on a different date than it was notarized. Sometimes
individuals who are beneficiaries have also acted as witnesses. Finally if the
will was not notarized, then it may be necessary to find the witnesses and have
them execute affidavits or in some instances give in court testimony. This can
make probate of the will more difficult and possibly much more expensive.
Do I need to hire a lawyer to help me go through
probate court?
There is no law that
requires you to hire a lawyer to help you to probate a deceased person’s
estate. Nevertheless, probating that estate will go much quicker and smoothly
if an attorney who understands the probate system is involved. This is a
situation where trying to save a little bit of money could cost a great deal of
aggravation.
What if the person who died had no property or
belongings of value?
Even if the person who died
had no property or belongings of value, you should nevertheless consult with an
attorney to determine if anything needs to be done. It may be that the person
who died was owed money by others, or had claims to property that was not
actually in their possession. In any event, that person’s will should be filed
with the clerk of court in the county where the deceased last resided.
If I don’t like how the executor or administrator is
handling the probate case, can I hire my own attorney and contest what they are
doing?
Yes, any heir, person who
believes they should be an heir, co-executor, or co-administrator can hire
their own attorney. You should be aware though, that if you do, you are
personally responsible for the fees, not the estate, and the judge is
not required to approve the fees.
© Rod Powell 2014
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