Three Basic Steps To Probate Part 2 Of 4

Three Basic Steps To Probate Part 2 Of 4



The steps of probate are tasks that have to be completed on behalf of any person who dies, whether he or she has a will, trust, or neither. These chores can be easy or very difficult, depending on the nature of the decedent’s property and the reasonableness of the people involved. But much of this business really cannot be avoided, even if probate itself is avoided.

Most states have streamlined probate procedures for handling the settlement of small estates and uncomplicated larger ones. In a few states, the procedure for small estates may not even require a trip to probate court. But even where court is necessary, if nobody is protesting or fighting over anything, the process need not be as bad as many people fear.

If the decedent left a will, there should be an executor named in it to manage the estate and wrap up the decedent’s affairs. If there is no will, the court will appoint an administrator to fill this role. The generic term “personal representative” is often used to refer to an administrator or executor. With or without a will, the probate process can be divided into three steps:

Step 1. Collection, inventory, and appraisal of all assets that are subject to probate

One of the executor’s or administrators first and most important duties after appointment is to take an inventory of estate assets. These assets include money that is owed to the decedent or the estate, e.g., loans, final paycheck, life insurance, or retirement account(s) made payable to the estate. This inventory must be filed with the court.

If the decedent’s property consists entirely of bank and stock brokerage accounts, for example, the account numbers and latest balances will be listed. Valuing real estate or an antique car collection, by contrast, would probably require a professional appraisal. The detail and accuracy necessary is dictated by the circumstances and degree of scrutiny being shown by other interested parties.

An estate checking account is usually a good practical idea for paying the decedent’s household final bills and estate expenses (e.g., attorney, appraiser). This checking account is useful for combining all the decedent’s financial accounts into a single pot. Thought should be given, however, before stocks or bonds are sold. It may be unwise, for example, to convert a good investment into cash in a checking account merely for convenience’s sake.

Step 2. Paying the bills, taxes, estate expenses, and creditors of the decedent

The personal representative is never personally responsible for paying these expenses out-of-pocket if estate funds are not available. The surviving spouse and children are generally given an allowance under the law, which varies greatly from state to state, whether or not there is a will. Generally, an allowance comes “off the top” and is set aside first. Thereafter, the order of payment of claims against the estate is usually:

  1. Costs/expenses of administration

  2. Funeral expenses

  3. Debts and taxes

  4. All other claims

The personal representative reviews the decedent’s final bills, debts, and any claims against him or her as well as the supporting proof. The personal representative then pays or settles those that are valid and rejects the rest. He or she may hire an attorney, with estate funds, for advice or to defend or negotiate any legal claims. (An example of such a claim may be a motorist demanding compensation for injuries suffered in a car accident caused by the decedent a few months previously.)

There are procedures under state law dictating what a rejected claimant or creditor can and must do next to keep the claim alive. This may even involve filing a lawsuit against the estate. Anyone who feels that the estate owes him or her money is likely to have only a limited time to begin further action. After that period expires, the claim may be barred forever. The certainty of that cut-off is an often-overlooked argument in favor of going through probate. Some states allow creditors to wait until after probate proceedings to approach (or sue) those to whom the estate has been distributed. If they have been given notice, however, most creditors will not wait until later, even if it is allowed.

Step 3. Formal transfer of estate property according to the will or by the state laws of intestacy succession (if there is no will)

When all rightful claims, debts, and expenses have been paid, the remainder of the property is distributed by the executor as the will directs. (At this point, if there is no will, the administrator distributes property according to state law.) The executor generally has the discretion to distribute the estate in cash or in kind (i.e., give away the property itself), but the will can specify otherwise.

The executor may sell or transfer real estate if the will permits it (most do), but only after a legally specified waiting period. The executor usually may sell or transfer the testator’s (decedent’s) personal property any time but may not begin final distribution of property or sale proceeds until after a waiting period provided by state law (e.g., six months).

When the waiting periods have expired and all legitimate bills, debts, and taxes have been paid, what remains of the estate is available for distribution to heirs or beneficiaries. Only then may the executor make disbursements of cash, send copies of documents such as deeds and investment statements showing new ownership, or transfer physical property to the respective beneficiaries.

The waiting period before property may be distributed, even were it not required by law, is a very practical idea. The personal representative cannot immediately rule out the existence of a forgotten lawful obligation the decedent might have left behind. In fairness, the law requires that all creditors of the decedent have notice and a chance to present their claims. That is also why the executor or administrator publishes a legal notice in the newspaper that the estate is in probate.

A final settlement or accounting is generally required of all the personal representative’s dealings on behalf of the estate. Any party who intends to object to any aspect of the probate proceeding should come forward and be heard at this point if not sooner. Once the judge approves the final settlement, the personal representative usually has no further duties, and the estate no longer exists.

Wills and other legal documents often refer to “real” and “personal” property. Real property refers to buildings and land; most people are familiar with that term. But many are unaware that personal property is a specific legal term referring to anything that is not real estate (e.g., cash, a computer, shares of stock, an individual retirement account).

The probate process is often portrayed as a nightmarish ordeal. If there is no conflict or controversy, however, much of it is simply wrapping up the decedent’s affairs and performing tasks that must be done even when probate is avoided.


Richard Emanuele of Team Emanuele is a Certified Probate Real Estate Specialist, contact us today to discuss any questions or concerns that you might have about listing a loved ones probate property.

(702) 570-0073

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Phone: 702-506-4090
Dated: April 24th 2015
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About Richard: Richard Emanuele is a top Producing Real Estate agent who holds distinguished designations such as: ...

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