LEGAL ASSISTANCE
A lot of my clients ask me, "what is Probate and what causes it?"
Probate means "to Prove". To prove who should own the property after the decedent. Probate is a court administered process which is used to determine, in a fair manner, who should own the property next.
What Causes Probate?
Probate is caused when a decedent owns property, and the decedent’s signature is required to transfer the asset to someone else. Because the decedent has died it is difficult to obtain his/her signature to effect a legal transfer. The problem is the need for the signature; the solution is probate. During probate the court orders assets to be transferred to someone else.
Size
Probate is not caused by having too little or too many assets. If you have any amount of real estate or $100,000 or more of non real estate probate assets, your estate will be submitted to probate. A probate asset is one which requires your signature to transfer. A non-probate asset has a beneficiary designation attached to it such as life insurance or annuities or is owned in joint tenancy.
Wills
Probate is not caused by having a will or not having a will. If you do not have any probate assets, i.e.: assets which require your signature for transfer, and all you own are assets that transfer automatically, such as life insurance, annuities, IRA’s, 401K’s, Joint Tenancy accounts or a Community Property Agreement, then your estate will not enter probate.
Creditor Claims and Debts
If a creditor is owed money from a deceased person he can request that a probate be started. Before funds may be distributed to beneficiaries from probate assets or non-probate assets (except for life insurance) the creditors of the estate must be paid first. However if a representative or agent of the estate pays the creditor a probate may be avoided.
Who gets paid in probate?
Court Charges a Filing Fee
A common misconception is that a county court receives a percentage of your estate. In Washington the county court receives a one time filing fee which is about $200. The judges, clerks and staff of the court are paid from state taxes Attorneys and Executors
Attorneys and Executors get paid. However, another common misconception is that attorneys in Washington receive a percentage of the gross or net estate. In Washington the law allows an attorney and a personal representative, also known as an executor, to charge a "reasonable fee”, based on an hourly rate. The hourly rate varies from firm to firm.
However, each state is different in the fees attorneys and personal representatives are allowed to charge. For example, Hawaii's fees for attorneys and personal representatives start at 5% of the gross estate. Both parties are also entitled to a share of the income generated by the estate during the probate process.
A probate will occur in every state in which you own real estate. Thus, you might have several probates occurring at the same time. The important thing to remember is that probate is not a tax and it may or may not be necessary depending upon how your property is owned.
What about those people who quote 1%-5% or other percentages for attorney fees?
They are not telling you all of the facts. Every probate is different because every estate contains different assets and the heirs of that estate are different. Therefore, there will be no statistical correlation with the time spent from one case to another and the resulting fee charged.
How long does probate take?
Probate in Washington can take as little as 17 weeks, or as long as 35 years. The timing depends upon the complexity of your estate.
