Understanding Probate: Death Probate & Living Probate

As part of our 2023 Ohio Estate Planning Guide we include some important guidelines surrounding probate:

Probate - What Does it Have to Do With Estate Planning?

Most people have heard that they should try to avoid probate, but do not understand why, this page explains the probate process - which is long and costly.

How much does Probate cost?

Probate costs generally amount to between 5% and 7% of the gross value of the estate. Probate fees are often calculated on your estate’s gross value without deductions for liens or encumbrances. If you have property worth $100,000 but you owe $90,000 to a bank or financial institution, your probate fees may be based on the full $100,000 value of the property, not your $10,000 in actual equity. As you can see, this valuation method unfairly increases the size of your estate and results in the payment of larger fees.

How long does Probate take?

The slow progression of an estate through the probate process can be very frustrating for families. Although the process generally takes six to nine months to complete, some estates may take over a year. Most people assume that their estates are simple and will glide through the system. Regardless of how simple an estate appears, it’s very difficult to close a full probate in less than six months because of all the steps that must be completed to the satisfaction of the court.

Death Probate and Living Probate:

When discussing estate planning, there are actually two forms of probate we should be concerned about: – death probate and living probate. Death probate involves the legal administration of your estate upon your death. Living probate deals with the appointment of a guardian to manage your affairs in the event you become incapacitated. Let’s examine each form of probate in a little more detail.

What is Death Probate? Settling an Estate.

Death probate is the process through which assets held in the name of a deceased person are legally transferred to his or her heirs. In addition, any debts of the decedent are paid, and any unfulfilled legal obligations must be resolved. The probate court supervises all of these activities. The probate process is typically a long, complicated, and costly process for many families. Here are the basic steps to settling an estate:

Probate Process Step One: Filing Petition and Gathering Material

A formal written application to the court along with a filing fee must be submitted to the court to start the probate process. One of the probate court’s first jobs is to approve or appoint someone to handle the affairs of the estate. This person is called the executor or administrator depending upon the circumstances and whether the deceased person died with or without a Will. (To keep things simple, we’ll call this agent of the estate a “personal representative.”) Generally, the first thing the personal representative does is hire an experienced probate attorney. Although having an attorney is not a legal requirement, as a practical matter it is almost impossible to navigate the probate process without one.

Probate Process Step Two: Publishing Notice to Heirs

The second step is to ensure that all of the deceased person’s heirs at law be notified. This means that certain relatives who are not named as beneficiaries under the Will are put on notice that a probate proceeding has commenced. This can lead to a Will contest lawsuit by an heir who is unhappy about being left out of the Will.

Probate Process Step Three: Inventory and Appraisal Assets

During probate, all assets in the estate are usually frozen so that an accurate inventory and appraisal can be made. As a result, during this period many of the assets cannot be distributed or sold without permission from the court. The court may often require formal written appraisals for many items, such as real estate appraisal, antiques, collectibles, automobiles, furniture, and other valuable assets. Appraisal fees can be expensive and, like all expenses, are paid for out of the estate.

Probate Process Step Four: Final Distribution and Closing of Estate

Finally, after the court is satisfied that all notice requirements have been met, it will order all debts, claims, taxes, attorney’s fees, the personal representative’s compensation, and any other miscellaneous expenses to be paid. Only after all the bills are paid will the probate court permit the
distribution of the estate to the beneficiaries named in the Will; or if there is no Will, to the designated heirs at law.

Estate Planning Guide

At Joseph L. Motta LLC we are devoted to helping our clients leave a legacy - not a predicament. We understand estate planning is not as easy as making a will and setting up some estate planning documents, that's why we treat every client with the attention each unique situation deserves. We create a comprehensive estate planning guide each year for you to use as a guide and reminder if any part of your plan could use an update.

Included in this 2023 Estate Planning Guide:

  • Drafting a Last Will and Testament. Why is relying on a Will alone is not part of a comprehensive estate plan.
  • Benefits of a Living Trust. What is a revocable living trust and how can it be an efficient tool to avoiding probate at your death, as well as to avoid living probate in the event of your incapacity.

What is Living Probate?

When an individual becomes mentally incompetent and unable to manage his or her personal and financial affairs, it is necessary to undergo living probate. Living probate refers to the guardianship process. An individual, generally a family member, applies to the probate court to be appointed guardian of the incompetent person. The applicant has the burden of demonstrating the person’s incompetence by clear and convincing evidence. Once appointed, the guardian must present the court with a full inventory of the incompetent person’s assets and provide detailed accountings on annual or bi-annual basis showing the court how the incompetent person’s assets have been managed. The guardian must seek the court’s approval for any expenditure of the incapacitated person’s funds. The entire procedure is expensive, time-consuming, and burdensome.