What Is Probate?

(And Is It Bad?)

Have you heard horror stories about probate being a long, expensive process that gobbles assets to pay fees? And that creating a living trust is possibly a way to avoid it. Or, maybe you’ve heard that probate isn’t that bad. So, which is it?

Either scenario could be true because the probate process typically depends on how complex the estate. A large, extensive estate may require detailed planning to avoid probate perils. A small estate might not pass through probate at all.

Every state has its own probate laws, and some have streamlined the process to make it less difficult.1 As you consider your estate plan, here are some things that may help you understand how probate works.

What Is Probate?

Probate is the legal process for distributing assets after a person passes away, and it may occur with or without a will. If there is a will, the court validates it and appoints a personal representative (or executor) to handle and distribute the deceased person’s (also called the decedent’s) assets to beneficiaries and heirs. 

A Personal Representative

A will typically nominates a personal representative. If there is no will, the court appoints someone.1 Either way, the court confirms the person’s eligibility, then the representative receives authority—in the form of a document—to collect the assets and pass them on to those named.


Usually the representative pays the decedent’s debts, bills and taxes before distributing the assets. This is a big part of why probate may take time.2



Some states provide for a simpler probate process for smaller estates. What is considered to be a small estate varies by state, so make sure to check the laws. Some states may allow the entire probate process to be skipped if the estate meets certain requirements.1 But again, make sure to do your research or contact a lawyer to ensure you're following the proper rules.

What About a Trust?

With a living trust, the assets are already “distributed” to the trust, so probate is not necessary. Understand the difference between a will and trust.

Do All Assets Go Through Probate?

Many types of assets don’t require probate. An estate may include “probated” and “non-probated” assets.

Types of Non-Probated Assets

Non-probated assets generally include any bank, life insurance, retirement and brokerage accounts that list a beneficiary. Such accounts have Payable on Death or Transferable on Death designations.

Property held in joint tenancy with rights of survivorship, such as real estate and bank or brokerage accounts, along with property held in a trust, are all non-probated assets. 

Types of Probated Assets

Probated assets are held solely in the decedent’s name without a designated beneficiary.

These may include bank and brokerage accounts, personal property such as vehicles, real estate or a life insurance policy with the decedent or estate listed as beneficiary. 

 


How Long Does It Take?

Probate can range from a few weeks or months to several years. The length of time depends on several factors including state laws and the estate’s complexity. Other factors can include the existence of a properly executed will, debts to be paid, estate taxes owed and whether or not heirs get along.

Often, state tax laws and various filing requirements cause the biggest delays. For simple estates, many states offer expedited processes that last just a few months.

What Does It Cost?

Costs vary depending on the complexity and value of the estate as well as standard fees set by state law. Fees may include appraisal costs, court filing fees, accounting fees and executor fees.

There are also fees if you use an attorney. These are usually categorized into three categories: hourly fees, flat fees or fees based on a percentage of the estate’s value.3 That doesn’t account for litigation if someone contests the will. The hassle-factor and cost of a complicated process are the primary reasons probate gets a bad name. But many estates are settled with minimal fuss. 

To learn more about probate or draw up your own estate plans, an estate planning attorney can discuss your specific situation and potential needs.


Does This Have You Thinking About Your Investments?

We can help answer questions about your financial plan.

1How Probate Works: A State Comparison, LegalMatch, July 2020.

2How Long Should You Expect the Probate Process to Last?, The Balance, July 2020.

3How Much Do Lawyers Charge to Help With Probate or Settling an Estate?, Lawyers.com, November 2019.

This information is for educational purposes only and is not intended as estate planning advice. Please consult an estate planner or attorney for advice regarding your situation.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

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