When someone you know passes away, all of the possessions they owned are either distributed immediately to new owners according to pre-existing conditions (e.g. payable-upon-death accounts) OR broadly lumped together into what is known as an estate.
Probate is the legal process that exists to make sure that a deceased individuals wishes are properly carried out, their estate is fairly distributed and that the any creditors have a chance to state their claim (including the government's tax cut, if any).
In this complete guide, we’ll cover:
- What probate is
- What happens during probate
- When you can avoid probate
- A few common probate questions
What exactly is Probate?
Probate is the formal, court-supervised process of carrying out someone's last wishes by validating their last will & testament (if any), resolving all outstanding debts and taxes, and distributing remaining assets to beneficiaries in accordance with the will or local law in cases without wills.
Put another way, probate is how all the stuff someone owned is distributed between family, the government, and people the person owed before they passed away.
Inheritances cannot be distributed until the end of probate, and the probate takes an average of 12 months to complete.*
Back in the day, families were left to divide possessions amongst themselves. And as you can guess, it was chaos. Probate exists to bring order to inheritances. Probate also involves paying any and all debts to prevent descendants from receiving money that is really owed to a creditor (someone the person who passed away owed money to).
What happens during the probate process?
Quick look: the phases of probate
Probate broadly includes these 6 phases:
- Qualify as executor or personal representative of the estate
- Verify & interpret valid will or estate planning wishes
- Generate inventory & appraisal of all estate assets
- Perform ongoing management & administration of the estate
- Assess & file any applicable income or estate taxes
- Divide and distribute remaining assets to rightful heirs
The catch is that each of the phases has quite a few steps involved in each of them.
Specific probate steps and executor responsibilities
And here are some of those specific probate steps and responsibilities:
- The family receives an official death certificate following a death
- The family finds and files the will at the probate court located in the county where the deceased lived (if it exists)
- If no will exists, the family decides for someone to step up to serve as executor or personal representative (these mean the same thing)
- The chosen executor does a quick analysis of existing probate assets and sees if they can avoid probate (hint: if they owned a home in their name alone, chances are the estate will go through probate).
- If not, then the executor chooses to initiate probate. This is done by submitting a form(s) and death certificate at the relevant probate court.*
- A probate judge will review the petition and officially “appoint” the executor if everything checks out.
- Once an executor is appointed, then they will receive their letters testamentary or letters of administration, which both give the executor legal authority to manage an estate.
- If required, the executor will post a probate bond.*
- The executor will then open an estate account, file notice to creditors, begin their inventory of assets, and begin submitting all necessary documents and paperwork to the probate court.
- After a summary of all assets, debts, and taxes are collected, the executor will begin to pay debts and taxes according to a state’s particular order of distribution.
- After all debts, taxes, expenses, and fees have been paid, the executor will submit a final accounting and plan to the probate judge on how they will distribute the inheritances (if any).
- The executor distributes the inheritances according to the will or intestacy laws and closes the estate account.
- The probate judge officially closes the estate and ends probate.
While there are ways to avoid or abridge the probate process, probate is generally something families have to do if they want to receive their inheritances. If assets are hung up in probate, no family member or beneficiary has the right to do anything with them.
For an even more thorough walkthrough of probate, read: Probate: The Beginner’s Guide
Do all estates go through probate?
The vast majority of estates go through probate, but the burden and effort required can be significantly reduced with an estate plan that transfers ownership of assets directly to beneficiaries upon death or to a trust in advance of death.
How to avoid or shorten probate
The only way to skip or abridge probate is if an estate’s probate asset value is below the small estate threshold set by the jurisdiction the person lived in.
For example: in California, the small estate threshold is $184,500.* So if the estate you’re managing has fewer total probate assets than that number, you can just submit a form with what the person owned and skip a lot of bureaucracy.
Some states have different names for this shortened version, but every state has a way to shorten probate.
But what is a probate asset, anyway?
Think of everything someone owned, including cash and investments, as falling into two separate buckets.
Bucket #1 includes probate assets.
These are any assets owned solely by the individual at the time of death and after death — meaning there was no mechanism like a transfer-on-death clause to switch ownership after death.
Essentially anything that was 100% theirs is a probate asset.
Common probate assets include:
- Accounts held or titled in single name without transfer-on-death or payable-upon-death clauses
- Real estate without right of survivorship
- Tenants-in-common property
- Assets where the named beneficiary is already deceased
- Cars and boats owned in their name
- Collectibles and other household items
- Digital assets (NFT's, Cryptocurrency)
- Jewelry
Bucket #2 includes non-probate assets.
Non-probate assets are any assets that aren’t considered owned by the individual after death.
Common non-probate assets include:
- IRAs with beneficiaries
- Assets passed to a trust before death
- Bank accounts with transfer-on-death clauses
- Life insurance policies
- College savings plans
- Pensions
- Jointly-owned assets
- Assets passed to spouses in community property states
For a complete list of probate vs. non-probate assets, check out: The Difference Between Probate and Non-Probate Assets
In terms of probate, bucket one is the only bucket we care about. That’s the only one you add up when calculating probate estate value and is what determines if an estate needs probate or not. Executors are also not in charge of non-probate assets, although they may be the beneficiaries of some.
For more on this topic, see: How to Avoid Probate
The Most Common Probate Questions
How long does probate take?
The timeline of probate varies based on:
- Size of estate
- Type of probate assets
- Number of beneficiaries
- If disputes arise
- If there is a will contest
- If professional help is hired or not
But in general, plan for around a year.
How much does probate cost?
Probate costs on average $14k, but that money comes from the estate — not the executor or administrator.*
- Usually 5% of the estate goes to the executor.
- ~0.5% of the bond value goes to the bond company
- Court filing fees that vary but usually are a few hundred dollars
- Attorney fees (if you use them) — easily a few grand.
- Filing notice to creditor fees (newspaper announcement)
- Any bank account fees when opening and closing the estate account
- The time and opportunity cost of all the time you spend working on probate
To see specific probate cost breakdowns, see: How Much Does Probate Cost? Who Pays + How to Save
Do I need a probate attorney?
Not necessarily. Some states require probate lawyers, others don’t. But even if your state doesn’t require it, depending on your situation they can be a huge help.
This piece has what you need: What is a Probate Lawyer and Should You Hire One? Easy Guide
Can I serve as an executor if I live in a different state?
Yes, but states usually have additional requirements for out-of-state executors like having to hire a resident process agent.
Is an executor responsible for estate debts?
It is rare, but they can be if executors fail to follow the law, ignore the will, or make egregious mistakes.
More on those errors here: When is an Executor Liable for Estate Debts?
The bottom line on probate
Probate is the government-supervised process of dissolving someone’s financial life. Families and probate courts appoint executors to take control of an estate, pay off all debts and taxes, and then ultimately distribute inheritances if cash is left over. Probate takes an average of one year to complete and encompasses a wide range of executor duties.
