When talking about estate plans, inheritances, and the like, one term that is always put out there is “probate.” People often hear that their assets will need to go through probate, or maybe encounter others complaining about it. While the term “probate” gets thrown around a lot, many don’t know what exactly it is and how it functions.
What is Probate?
Probate is an administrative court proceeding that divides the assets of a deceased. A judge oversees the process and an executor administers the divisions. The purpose of going through this process is to ensure that the assets of the deceased get divided up according to their will or, if absent, the default rules in intestacy statutes.
A will document controls the probate process. The court will see to it that the provisions and intents of the will are followed all throughout and ultimately, that the assets are given to the beneficiaries named by the deceased. The will tells the court:
Who is in charge of executing the will
To whom the assets go
Who the backup beneficiaries are in case primary ones cannot receive the assets
The conditions of receiving the inheritance
Writing a will is highly recommended because it enables people to control what happens to their property when they pass away. They can be very specific or general in their provisions, and the court will follow and uphold them.
Without a will, probate is required to determine who gets the assets. The default rules of intestacy statutes will apply, which sets forth the priority beneficiaries. The rules may differ across states, but in Minnesota, the succession begins with the spouse and children.
3 Types of Probate
The probate process can be categorized into three different types: informal probate, formal probate, and formal supervised probate.
1. Informal Probate
The informal probate process does not require a court hearing to complete. Although the process may differ per county in Minnesota, informal probate can typically be done through the mail. Because the parties do not need to go to court and schedule a hearing, the process is faster and more cost-effective.
However, the informal nature of this type of probate does not come without disadvantages. The lack of formalities may make it difficult to resolve disputes because there is no access to a judge or get special court orders, such as excusing the executor from liability.
2. Formal Probate
Formal probate is the most common process, where the division of the estate is done in official court hearings. Depending on the complexity of the estate, this can be completed in one or two hearings. In formal probate, the court appoints the named executor, ensures to it that they understand their role, and orders them to execute the provisions of the will.
This type of probate is more organized and preferred for assets like real estate. However, they can be more costly.
3. Formal Supervised Probate
The formal supervised probate is a stricter version of the formal probate. Instead of just appointing the executor, the judge oversees and supervises the entire process. Complexities, confusions, and contests, among others, can call for formal supervised probate. This can include situations like:
There are many beneficiaries
Ambiguities in the will or estate document
Issues in the will, like unsigned or uncompleted documents
Because the court supervises the entire process, formal supervised probate can get expensive.
Can You Avoid Probate?
The probate process can get expensive, overwhelming, and time-consuming. Because of this, many are looking for ways to avoid it altogether. The good news is that there are estate plans, such as revocable trusts or living trusts, that do not require probate. If avoiding the court process is a priority, proper estate planning should be done.