What is probate?
Probate is the court process used to administer the estate of a person who has died. The court appoints a personal representative (also called an executor) to take charge of the estate, gather information about the person’s money and property, pay bills and taxes, and distribute the estate to the heirs or beneficiaries.
When is probate necessary?
Probate is needed in order to transfer the legal title to assets to the deceased person’s heirs or beneficiaries if the person who died owned real property, bank accounts, stock, or other assets in his or her name alone. Probate also is needed if there is a debt owing to the deceased person or if there is a disagreement about who should get the assets in the estate.
Probate may not be needed if the person who died owned very little, or if the person owned all of his or her assets jointly with right of survivorship or with beneficiary designations. For example, if a married couple owned all of their assets jointly with right of survivorship, there would not be a probate when the first spouse died. Probate generally is not necessary if the deceased person put all of his or her assets in a revocable living trust.
What happens if there is a will?
The person named in the will as the personal representative (or executor) usually meets with an attorney to talk about the assets in the estate and decide whether probate is needed. The attorney prepares a petition for probate to be filed with the court and attaches the original will and an affidavit from at least one of the people who witnessed the signing of the will. After the petition is filed and accepted by the court, a judge will sign the judgment appointing the personal representative. The court will then issue the Letters Testamentary, which is the official proof of the personal representative’s authority to act in an estate in which there is a will.
What happens if there is no will?
If the person who died did not have a will and probate is necessary, a close relative usually starts the process by meeting with an attorney. The attorney prepares a petition for probate to be filed with the court explaining that the person died without a will (“intestate”) and asking the court to appoint the close relative as the personal representative of the estate. After the petition is filed and accepted by the court, a judge will sign the judgment appointing the personal representative and setting the amount of the surety bond. After the bond is filed and approved, the court will issue the Letters of Administration, which is the official proof of the personal representative’s authority to act in an estate in which there is no will.
What powers and duties does a personal representative have?
Often a will includes a provision waiving the requirement that the personal representative have a bond. If there is no will or if the will does not waive the bond, the personal representative must get a surety bond before he or she can take control of the assets that belonged to the person who died. The amount of the bond is set by the court based on the total value of the assets in the estate plus the estimated income of the estate for one year.
The personal representative has to notify the people named in the will (called the beneficiaries) and the heirs (the relatives legally entitled to inherit the estate when there is no will) about the probate proceeding. In addition, written notices have to be mailed to the state of Oregon and to creditors of the deceased person and a similar notice has to be published in a local newspaper. The notices tell creditors that they have four months in which to make claims against the estate.
The personal representative has to file an inventory with the court listing the assets in the estate and their values. Depending on the provisions of the will, the personal representative may sell some of the assets. He or she also pays bills and debts and collects any money owed to the person who died. The personal representative works with an accountant or other tax preparer to file the final federal, state, and local income tax returns for the person who died, plus whatever gift and estate, inheritance, and fiduciary income tax returns are needed for the estate, and pays any taxes that are due. When the estate is ready to be distributed, the personal representative files an accounting with the court and requests permission to pay any remaining expenses and distribute the estate to the beneficiaries according to the will or, if there is no will, to the heirs according to the laws for intestate estates. Notices and copies of the accounting and petition for distribution have to be mailed to the beneficiaries or heirs.
The courts in Multnomah County and Clackamas County require a personal representative who is not a professional fiduciary to take a class that has been approved by the court. The 90 minute class is presented by Guardian Partners and costs $100 in 2018. You can find more information about the class at the Guardian Partners website, http://www.guardian-partners.org/.
How long does probate take?
Probate can be started soon after the person dies. The process often is completed within a year. If there is real property that must be sold or if there are complex tax issues or other complications, probate can take longer.
How much does probate cost?
The expenses for probate include the court fees for filing a petition ($265 to $1,109 in 2018) and for filing accounts ($33 to $1,076 in 2018), the cost for publishing the legal notice in the newspaper, the bond for the personal representative (if required), certified copies, the fee for the accountant or tax preparer, and expenses related to the assets in the estate, such as insurance premiums, storage fees, appraisals, and shipping costs. The personal representative’s fee is a percentage of the value of the estate. The attorney fees are based on the amount of time spent, and must be approved by the court before they can be paid out of the estate. The attorney submits a detailed description of the time spent on the case and the out-of-pocket expenses to the court and asks the judge to give the personal representative permission to pay those legal fees and costs from the estate. Probate does not affect whether tax returns have to be filed and does not change the amount of taxes that have to be paid.
Is there an alternative to probate for smaller estates?
Oregon has a small estate proceeding that can be used for estates in which the real property has a fair market value of $200,000 or less and the personal property (personal property is everything other than real property; it includes bank accounts, stocks, bonds, cars, furniture, jewelry, etc.) has a fair market value of $75,000 or less. These are the small estate limits as of 2018. A small estate proceeding is simpler and less expensive than a probate, and usually takes less time than a probate.