Navigating the probate process can often be complex and emotional. Following a person’s passing, the estate probate process is vital in ensuring the orderly distribution of assets. However, it can also present challenges and pitfalls, leading to delays, disputes, and increased costs.
The process is best handled by an estate probate attorney who can manage the estate as efficiently and as accurately as possible. This can help the deceased’s surviving loved ones resolve legal matters as soon as possible and properly grieve their loss. Here is what everyone involved should know about estate probate, its common challenges, and how these can be mitigated.
What Is the Probate Process?
Estate probate is a legal process that settles a person’s estate after death. Before the assets are divided and bequeathed to their new owners, these must undergo review by the probate court to pay debts and other outstanding liability claims.
If the decedent had a will, an executor (a personal representative in charge of administering the will) must validate it through probate and pay any remaining liabilities before distributing the assets to beneficiaries as indicated in the will.
If there is no will or the will is deemed invalid, an administrator will be appointed to settle outstanding liabilities. Once resolved, the assets are divided among legal heirs provided by their state’s inheritance laws. In South Carolina, heirs can depend on the decedent’s marital status and legally-recognized children:
|
Intestate Succession |
|
| Familial Situation | Legal Heirs |
| Surviving spouse, no children | Spouse inherits the entire estate |
| Surviving spouse and children | Spouse inherits half, the other half divided between children |
| Unmarried with children | Equally divided between children |
| Unmarried with no children | Closest living relative (starting with parents) |
| No living relatives | Escheat (Estate is given back to the state of South Carolina) |
There may be some additional steps or other beneficiaries, depending on the circumstances of the case. However, the probate process generally involves the following steps:
1. Appointment of Executor or Personal Representative: Either the will names an executor, or the court appoints an executor to manage the deceased person’s estate. This individual is responsible for gathering assets, paying debts and taxes, and distributing remaining assets to beneficiaries.
2. Notification of Creditors and Beneficiaries: Creditors must be notified of the deceased person’s passing and provided a window to file claims against the estate. Beneficiaries named in the will and heirs determined by law are notified. If there is no will, closest living relatives must be notified of their potential inheritance.
3. Inventory and Appraisal of Assets: The executor must create an inventory of the decedent’s assets and appraise them to determine their value. This includes real estate, bank accounts, investments, personal property, and any other assets the deceased owns.
4. Payment of Debts and Taxes: The executor is responsible for paying off any outstanding debts of the deceased, including taxes, funeral expenses, and other liabilities. This may involve liquidating assets if necessary.
5. Distribution of Assets: Once debts and taxes have been settled, the remaining assets are distributed to beneficiaries according to the will or state law terms.
6. Final Accounting and Closing of Estate: The executor must provide a final accounting of the estate’s assets and expenses to the court. Once approved, the court issues an order closing the estate, and the executor is discharged from their duties.
Identifying Common Probate Challenges
While the act of probate estate is intended to facilitate the orderly transfer of assets, it can encounter various challenges that may complicate the process.
- Lengthy Process: Probate can be time-consuming and can take several months to several years to complete. Factors such as the complexity of the estate, the assets involved, the creditors and outstanding debts that need to be fulfilled, and any disputes from possible heirs that arise can prolong the process.
- Costly Fees: Probate involves various fees that can accumulate into an expensive process. Some of these can include court costs, executor fees, and appraisal fees, which can significantly reduce the value of the estate.
- Public Nature: Probate proceedings are a matter of public record. This means anyone can access information about the deceased person’s assets, debts, and beneficiaries.
- Potential for Disputes: Family conflicts, disagreements among beneficiaries, challenges to the validity of the will, or disputes over asset distribution can lead to litigation and delays in probate.
- Tax Implications: Probate may result in estate taxes, inheritance taxes, income taxes, or other tax deductions that can further deplete the estate’s value and reduce the value the heirs can receive.
How To Mitigate the Challenges in Probate Estate Delays
The most effective way to handle probate estate matters is to let an experienced attorney handle the probate process. However, individuals who want their loved ones to avoid probate challenges can plan their estate.
Through careful estate planning, individuals can ensure that some assets do not have to undergo probate. These include:
- Plan Ahead: Even small estate probate can be time-consuming for surviving loved ones, and having a plan accounts for the possibility of probate. Proper estate planning can streamline the probate process and minimize potential beneficiary disputes.
- Use Non-Probate Transfers: Not all assets have to undergo probate. Assets and financial instruments such as life insurance policies, retirement accounts, and bank accounts with payable-on-death (POD) or transfer-on-death (TOD) designations bypass probate and transfer directly to designated beneficiaries.
- Consider Joint Ownership: Community property and jointly-owned assets, such as real estate or bank accounts held as joint tenants with rights of survivorship, pass to the surviving owner outside of real estate probate.
- Utilize Trusts: Establishing a trust allows assets to be transferred to beneficiaries without going through probate. Trusts offer greater privacy, flexibility, and control over asset distribution than wills.
- Update Beneficiary Designations: Regularly review and update beneficiary designations on life insurance policies, retirement accounts, and other assets.
Small Estate Probate: How To Speed Up the Probate Process
While large estates can take months or years to resolve, there are some circumstances where probate could be simplified and made faster. For example, if there are no creditors, no children, and all the assets are jointly owned by the deceased’s surviving spouse, the process can take less time.
In South Carolina, estates that fall under “small estates” can be transferred more quickly by skipping probate. However, to qualify for this, estates must have the following:
- A net value lower than $25,000
- No real estate
- No pending or granted application or petition for appointment of personal representative from any jurisdiction
- At least 30 days after the person’s death
Inheritors must sign an affidavit for Collection of Personal Property Pursuant to Small Estate Proceeding and have it notarized and approved by a probate court judge. This document, along with a certified death certificate, can be used to claim the asset.
Summary Administrations
A summary administration is another probate process for small estates. While this doesn’t skip the probate process, it is a more streamlined process that is faster than regular probate. An estate can qualify for summary administration if the value of the probate estate is less than the sum of:
- $25,000
- The exempt property allowance (the amount that the decedent’s surviving spouse or minor or dependent children are entitled to under South Carolina law)
- Probate costs
- Reasonable funeral expenses
- Essential medical expenses of the decedent’s illness
In this case, probate can be resolved quicker because these costs may result in little left in the estate to divide among the inheritors. A Verified Statement to Close Estate must be filed.
Frequently Asked Questions
Can Probate Be Done Without a Lawyer?
Yes, a person can appoint anyone they trust as the executor of their will to handle probate and the executor/personal representative does not have to hire an attorney. However, it’s important to remember that probate is a long process that involves documentation and other obligations. Any errors could prolong the process and reduce the remaining estate beneficiaries can receive. Hiring an experienced attorney to handle the entire process is always the best option.
When Should Probate Be Filed After the Decedent’s Passing?
It varies between states. In South Carolina, the will must be delivered to the probate court within 30 days after the decedent’s passing.
Which Assets Can Avoid Probate?
Some assets, such as jointly-owned assets, trusts, and retirement accounts, can bypass probate. There are also cases where an individual can take steps before their death to minimize which assets must undergo probate. This is best done through estate planning with an experienced trust and estate planning lawyer.
What Factors Can Affect How Long Probate Takes?
It varies depending on circumstances. However, some of the most common factors that prolong the process to years can include:
- Estate Size and Complexity: Multiple assets and beneficiaries can make it challenging to divide the estate equally or based on the will’s instructions.
- Creditor Claims: South Carolina laws provide creditors a window of up to 60 days after receiving a Written Notice of Creditors from the representative or within eight months after the notice is published. The representative may decide to pay the debt using the estate, negotiate, or refuse to pay.
- Contesting the Will: If someone challenges the terms of the will or its validity, the probate court may take longer.
- Unpaid Taxes: If the decedent had unresolved tax issues such as federal estate taxes, these may need to be resolved before beneficiaries can receive their inheritance.
- Legal Battles Between Beneficiaries: If a will is open to different interpretations, it could cause conflict between the beneficiaries. They may have to go through a
Talk to an Experienced Estate and Trust Lawyer
While the probate process can present various challenges and complexities, proactive estate planning and strategic decision-making can help mitigate costs, delays, and potential disputes. By understanding the probate process, individuals can understand the importance of a smart estate plan.
Wiles Law’s team is experienced in estate planning, trusts, and other instruments that can be used in case of one’s untimely passing. Ensure maximized generational wealth is passed to loved ones with specialized solutions that minimize delays and challenges associated with probate.
Schedule your free consultation today for professional estate planning advice.