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Probate is a court proceeding that transfers assets to the beneficiaries once a person dies, whether by will or by intestacy (without a will). Many people try to avoid probate for several reasons, primarily because of the time and cost but also because the process is open to the public or, in the case of an ongoing business, it will likely be easier to transition the business to the successors through a trust. Click here to learn about trusts.
To begin the probate process, a personal representative who is named in the will files a petition to officially represent the estate.
The personal representative provides written notice to all known and possible creditors as well as heirs, beneficiaries and interested parties, giving them four months to bring a claim against the estate for any outstanding debts. A notice must also be published in a newspaper to alert other possible creditors.
The personal representative prepares an inventory to file with the court that identifies and values the deceased person’s assets. Depending upon the type of assets and the kind of records left by the person who died, this step can be quite straightforward or difficult and time consuming.
The personal representative must document all the money collected by and paid out from the estate and file that with the beneficiaries named in the will, the heirs of the deceased and the court. That account must also contain a narrative explaining the important actions taken in connection with the probate of the estate.
After court approval of the account and payment of all unpaid probate expenses, the deceased person’s assets are distributed to the beneficiaries and entities (such as charities or trusts) named in the will or, if the person died without a will, to his or her heirs.
Probate is not always necessary. If the deceased person owned bank accounts or property with another person as legally named co-owners, the surviving owner will usually acquire that property automatically. If a person dies leaving very few assets such as personal belongings or household goods, these items can usually be distributed among the rightful beneficiaries without the supervision of the court.
However, probate is usually necessary to clear titles to land, transfer stocks and bonds and distribute bank or savings accounts that are in the name of the deceased person only. Probate is also normally a necessity to collect debts owed to the deceased, settle disputes between people and the deceased or resolve disputes about the validity of the will.
Probate usually takes a minimum of six to nine months. It can last much longer if the estate includes property that is hard to sell or if there are complicated tax or other matters.
Under Oregon law, a personal representative is entitled to be paid a fixed percentage of the total value of the estate. Extra costs may be approved by the court if the estate is complicated. Other costs include court filing fees, legal notice expenses and attorney fees.
Probate can be avoided if a person creates a living trust before he or she dies. Establishing joint ownership of property and naming payable survivors for life insurance, IRA and 401K accounts as well as Payable on Death (POD) or Transfer on Death (TOD) Accounts will eliminate the need for probate.