Advanced Underwriting Consultants

Question of the Day – May 20

Ask the Experts!

Here’s the question of the day.

Question:  What is probate and what are its drawbacks?

Answer:   Probate is the court supervision of the transfer of assets at the owner’s death.  On its face, that seems OK.  In particular, where the family members don’t get along, the idea of having a probate judge act as referee seems like a good idea.

While each state has its own rules about how probate works, those rules are similar with regard to the drawbacks of the probate process:

  • It’s structured, and it takes a while to finish.  Since probate is a court procedure, there are rules and forms for everything.  Also, in most jurisdictions for most estates, the process takes months to run from start to finish.  Sometimes heirs will have to wait a year or more before they get their complete inheritances.
  • It can be expensive.  Since probate involves going to court, most personal representatives opt to hire a lawyer to guide them through the process.  The probate court charge fees for paperwork filings.  Under certain circumstances, the personal representative may need bonding to be able to act on behalf of an estate.  The costs vary widely depending on the jurisdiction, how well the heirs get along and the complexity of the estate.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day. 

Question of the Day – October 21

Ask the Experts!

Here’s the question of the day.

Question: I am working with a family where the mother passed away, leaving a modest-sized estate.  Is there any special, expedited probate process available for a small estate?

Answer: Maybe, depending on the state in which the person died, the value of the assets subject to probate and the complexity of the issues.

Probate is the court supervision of the transfer of assets. On its face, that seems OK.  In particular, where the family members don’t get along, the idea of having a probate judge act as referee seems like a good idea.

However, probate has its drawbacks:

  • It’s structured, and it takes awhile. Since probate is a court procedure, there are rules and forms for everything.  Also, in most jurisdictions for most estates, the process takes months to run from start to finish.  Sometimes heirs will have to wait a year or more before they get their complete inheritances.
  • It can be expensive. Since probate involves going to court, most executors opt to hire a lawyer to guide them through the process.  The probate court charge fees for paperwork filings.  Under certain circumstances, the executor may need bonding to be able to act on behalf of an estate.  The costs vary widely depending on the jurisdiction, how well the heirs get along and the complexity of the estate.

Some states have an expedited probate procedure available for small estates.  State rules differ about whether such a procedure is available, and what kind of estate qualifies for it.  In general, the small estate settlement process by-passes and shortens certain steps required by full probate.

In limited cases, the state or the asset custodian may permit a transfer at death through the use of an affidavit of heirship.  With such an affidavit, a close relative swears that certain family members are entitled to the asset in question, and that there are no other claims on the decedent’s estate.  The person filling out the affidavit usually takes personal responsibility if the information in the affidavit is wrong.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day.