At Phillips Ballenger, we believe that proper estate planning is essential in avoiding probate. Probate, a process regulated by statutory guidelines and applied through the courts, is triggered when an individual dies without a trust. This process, like other forms of litigation, can be long, arduous, and sadly, adversarial. This week, we give you an introduction to the probate process and what to do if you find yourself involved in a probate matter.
What Is Probate?
When someone dies without proper estate planning, their assets cannot legally be distributed without consideration and valuation of the estate’s net worth. The “Estate” is the decedent’s (deceased person) assets minus the decedent’s liabilities (think creditors, bills, encumbrances, etc.). Title 12 of the Nevada Revised Statutes (N.R.S. 132-156) governs the process of Probate Administration. This is where the court comes into play. As is the case, especially with larger estates, the legal process is complex, and therefore, it is essential to hire a probate attorney to assist in litigating the matter in the most efficient way. Once opened by the Probate Court, the estate will typically remain frozen until the Court issues the final Order closing the estate, thus allowing final distribution.
Below are some terms that are frequently used in the Probate process:
- Decedent: Deceased person.
- Heir: The legal successor/s of the decedent.
- Intestate: A person dies intestate when he/she dies without a will.The majority of Americans do not have a will (link).
- Testate: A person dies testate when he/she dies with a will.
- Executor: A person, named in a will, who oversees managing the estate and distributing the decedent’s assets (aka: Personal Representative).
- Personal Representative: A person, appointed by the Court, who oversees managing the estate and distributing the assets.
- Contested: When an interested party files a claim against the estate.
- Property: Personal property (including bank accounts, jewelry, art, household items, etc.)
- Real Property: Land, houses, easements, etc.
- Probate Commissioner: an appointed representative to hear Probate matters before the Court (similar to a Judge).
How Does Your Estate End Up in Probate?
What happens to your property when you pass away? Ideally, this is where your trust would be triggered, distributing your property as you explicitly intended without court involvement. However, and all too often, there is no trust document, or the trust was not properly funded and therefore, the estate must be probated. A common misunderstanding is that having a will keeps the estate out of probate. This is false! Although a will can provide the Court with additional knowledge regarding the decedent’s wishes, it does not exempt the estate from the probate process. Only a properly funded trust can provide probate protection!!
What Assets are Considered in Probate?
Any property belonging to the decedent (while alive) is considered as part of the decedent’s estate. Similarly, any debt obligations belonging to the decedent are considered in conjunction with the property. The Court wants to make sure that any rightful creditors are paid before assets