PROBATE BASICS

“Probate. I keep hearing about this, but what does it have to do with me?” This is a common question for people who sit down, talk about their future, and how they want their loved ones to handle their estate after death.  Many people want to learn about this process to make it easier for their friends and family when the time comes.  Others want to ensure that their estate is divided between specific friends and family, charitable causes, or any other organization that held significant value for them during their lifetimes.  Probate is the name for the administrative and legal court process that allows your individual wishes to be carried out after death.

Documenting your wishes with regard to your estate is primarily done through the creation of a Last Will and Testament, but not everyone creates a valid Will before their death. Furthermore, not every person has the type of assets or liabilities in their estate that need to go through the Probate process.  Every state’s Probate laws and procedures are a little different. In Washington, the basic probate process is fairly straight forward.

Non-Probate Assets vs. Probate Assets: An individual can designate a beneficiary to receive a particular asset upon their death. For individuals with minimal assets at the time of death, this is a cost effective method to pass down the funds in your accounts without additional procedures. For example, when you setup an investment account, the financial institution may have given you a document entitled a “beneficiary designation” or identified a “pay on death” beneficiary. The specific terminology differs, depending on the financial institution, but if you filled this out naming a specific beneficiary, the financial institution will usually transfer that account to the beneficiary after receiving a copy of the certified Death Certificate.  No probate is required, so that is called a “Non-Probate Asset.”  However, if you did not name a beneficiary, or the beneficiary is listed as your “estate,” then the Probate process may be needed in order to transfer this account to your heirs and beneficiaries.

Once it has been identified that a probate is needed, the first step is to identify whether the individual died with or without a Will. If you execute a valid Last Will & Testament, then your estate will be administered via “Testate” proceedings. If you did not create a valid Will, then your estate is administered via “Intestate” proceedings. In Testate proceedings, a person you nominate in your Will to act as the Personal Representative (formerly known as an Executor) can petition the court to admit your Will into Probate. The court can then authorize that Personal Representative to carry out the transactions necessary to pay debts and distribute your estate as indicated in your Will.  If you do not have a valid Will, then a family member, friend, or anyone who can reasonably determine what your estate contains (i.e. your assets and debts) can petition the court to be appointed as the Administrator. Both a Personal Representative and Administrator have the same role in Probate proceedings: to administer your estate, pay off outstanding debts and liabilities, and finally, distribute any remaining assets to your heirs and beneficiaries.

All probates filed in Washington require a few administrative steps to be taken before the estate can be distributed. This includes notifying the IRS that a personal representative or administrator has been given the authority to file a final tax return on behalf of the decedent.   The state of Washington is also notified through the Department of Social and Health Services, so that Social Security and other federal benefits can be terminated. This also gives the state an opportunity to recover certain benefits paid out during an individual’s lifetime (such as medical costs like Long Term Care Medicaid benefits). Next, a notice is published with the local newspaper, which allows any other creditors of the estate a period of four (4) months to submit final billing statements for debts incurred during the individual’s lifetime. The personal representative or administrator will negotiate to settle all debts.

After the four (4) month creditor period has expired, the personal representative or administrator can distribute the estate to the heirs or beneficiaries, notify the court that the estate has been distributed and that all administrative proceedings have been completed. After this, the personal representative or administrator is discharged from their role and the estate is closed. While complicated estates with significant assets or debts can take years to complete, most probate matters take approximately 6 to 8 months to complete.

As always, thanks for reading.

Barry M. Meyers

David M. Neubeck 

Sara LC Hulford

Elder Law Offices of

Barry M. Meyers, P.S.

www.elderlaw-nw.com

 

 DISCLAIMER: The content of this newsletter is: for information purposes only, subject to change by government agencies, should not be relied upon as current, and, does not constitute legal advice. Reading this newsletter does not establish an attorney-client relationship.