Probate is a process for transitioning an estate. Estates with less than $200,000 of probate assets and a vehicle can avoid formal probate with an informal voluntary administration.
For all other estates, probate is a process of:
Filing the will (if the decedent does not have one, the state has a will for the decedent)
Notifying beneficiaries and creditors
Inventorying the estate
Repaying debts to creditors
Paying both state and federal estate taxes
Preparing tax returns
Distributing the estate to beneficiaries
Probate’s initial step in Massachusetts takes 6-8 weeks from filing date to when the court begins its process. Overall, the process lasts a minimum of one year to allow creditors an opportunity to make claims against the estate.
The person in charge of the probate is the personal representative, called an executor or executrix in a will or an administrator if there is no will and appointed by a court.
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Probate fees are relatively inexpensive though the personal representative can be compensated, attorneys are often hired to handle the paperwork, appraisals are often required and CPAs are often needed to help with estate taxes.
Some assets avoid probate – specifically:
Those held in joint tenancy with right of survivorship when the other party is still living (though this can create tax issues so consult a tax professional)
Assets with a listed living beneficiary, such as life insurance, IRAs, annuities and bank accounts with “payable upon death” sections completed.
Assets held in a living trust.
Assets that avoid probate are still considered part of the net estate for estate tax calculations. Consult an attorney for legal advice on how to proceed with probate or how to plan to avoid probate.