When a loved one dies, his or her estate usually must go through a court-managed process called probate or estate administration. In this process, the assets of the deceased are managed, the debts are paid and the balance of the property is distributed. If your loved one’s assets were owned by and titled in a well drafted and properly funded revocable living trust, it is likely a court-managed administration will not be necessary, but a successor trustee will take action to administer the distribution of the deceased person’s assets. The amount of time needed to complete the probate of an estate will depend on the size and the complexity of the estate as well as the local rules and schedule of the probate court.
Probate is the court-supervised legal process through which a decedent’s assets are collected, his or her debts are paid and then the remaining assets are distributed to the decedent’s heirs or beneficiaries.
Every probate estate is unique, but most involve the following steps:
- A petition is filed with the proper probate court.
- Notice is provided to the beneficiaries under the Will and to statutory
- The petition seeks the appointment of a Personal Representative, called an Executor, if there was a Will, or an Administrator, if there was no Will.
- The Executor/Administrator may have to file an Inventory and appraisal of the estate assets.
- The debts owed to creditors are paid out of the assets in a statutory order of priority.
- Estate assets may be sold.
- Estate taxes, if applicable, will be paid.
- Remaining assets are distributed to the beneficiaries/heirs.
When the Executor/Administrator has paid all debts, filed the required tax returns, and distributed all of the estate’s assets, they file a Petition for Discharge with the court, asking to be formally relieved of his or her duties. If the court confirms that the Executor/Administrator has performed all the duties required, the discharge will be granted. This will close the estate and release the Executor/Administrator from any liability.
FREQUENTLY ASKED QUESTIONS
What happens if someone objects to my Will?
An objection to a Will is also known as a “Will contest” and it occurs fairly often in probate cases, but they can be very expensive to litigate.
To be able to contest a Will, a person must have legal “standing” to raise their objections. This usually happens when, for example, children are to receive unequal shares under the Will, or when distribution plans change from a prior Will to a later Will. In addition to disputes over the distribution of assets, Will contests can also be a fight over the person chosen to serve as Executor.
Does probate administer all property of the deceased?
Probate is the process by which title is transferred from the name of the deceased to the names of the beneficiaries.
Certain assets are called “non-probate assets” and do not go through probate. These can include the following:
- Property owned as “joint tenants with right of survivorship.” This jointly owned property passes to the co-owners by operation of law and does not go through probate.
- Retirement accounts like IRA and 401(k) accounts where there are designated beneficiaries.
- Life insurance policies.
- Bank accounts with “payable on death” (POD) designations, brokerage accounts with “transfer on death” (TOD) designations, or “in trust for” designations.
- Property owned by a living trust. Legal title to this property passes to, and is distributed by, the successor trustees without having to go through probate.
Does an Executor get paid for serving in that role?
Executors are entitled to reimbursement for all legitimate out-of-pocket expenses they incur in the process of managing and distributing of the deceased person’s estate. The Executor or Administrator may also be entitled to statutory fees, which in Georgia include a commission of two and one half percent (2.5%) of the value of the assets which come into the estate, plus two and one half percent (2.5%) of the value of the assets which are paid out of the estate, either as payments to creditors or payments to heirs or beneficiaries.
The Executor is required to carry out his or her duties as a fiduciary on behalf of the estate with the highest degree of integrity. Executors or Administrators can be held liable for mismanagement of estate assets in his or her care. It is recommended that the Executor hire an attorney and an accountant to advise and assist him or her with his or her duties.
How much does probate cost? How long does it take?
The cost and length of a probate can vary widely, depending on a number of factors including the value and complexity of the estate, the existence or non-existence of a Will and the location of real property owned by the estate. Will contests or disputes with alleged creditors about the debts of the estate can also add a great deal of cost and delay. Common expenses of a probate estate include executor’s fees, attorney’s fees, accounting fees, court fees, appraisal costs, and surety bonds. These can add up to somewhere between to 2% to 8% of the total estate value.
The Georgia Probate Process
The Georgia probate process can be time consuming and expensive to complete. A typical probate lasts at least 8 months to a year. A complicated estate can take more than a year to complete.
After the petition to probate the will or estate is filed, these are the duties and responsibilities of the personal representative of the decedent’s estate in Georgia:
- Appointment by the Probate Court: Letters Testamentary or Letters of Administration are issued.
- Gather and collect ALL assets of the estate; protect, insure, manage and invest.
- Ascertain ALL debts and expenses of administration in accord with statutory priority.
- Sell or liquidate assets IF NECESSARY as required r permitted by law.
- IF REQUIRED, file income, estate and other tax returns.
- Distribute remaining Estate property as required in Will or laws of descent and distribution.
- IF REQUIRED, file inventory, returns, and any reports with the court.
- Close Estate; file Petition for Discharge.
The only way to avoid probate in Georgia is to create a living trust and fully fund it (transfer titled assets to trust and change beneficiary designations on life insurance and retirement accounts to the trust). To learn more about and help you whether a will or a living trust is the best option for you and your family, please call us at 770-425-6060 for a complimentary Georgia Family Treasures Planning Session.