What is probate law?

The sequence

1. The will is filed with the probate court in the county where the person lived, and an executor is appointed — or, without a will, an administrator is appointed and state intestacy rules decide who inherits.
2. Notice goes to heirs, beneficiaries and creditors, who have a set window to make claims, commonly three to six months.
3. Assets are gathered, inventoried and valued as of the date of death.
4. Debts, final income taxes, any estate tax and expenses of administration are paid.
5. The balance is distributed and the estate is closed, usually with an accounting approved by the court or by the beneficiaries.

What happens without a will

Every state has intestacy rules that act as a default will. Typically the surviving spouse receives all or a large share, with the rest going to children; if there is no spouse or child, the estate passes to parents, then siblings, then more distant relatives. Unmarried partners, stepchildren and friends receive nothing under these rules. If no relative can be found, the property goes to the state.

What skips probate entirely

More than people expect: property in a living trust; accounts with a named beneficiary, such as life insurance, retirement accounts and payable-on-death bank accounts; assets held in joint tenancy with right of survivorship; and, in many states, transfer-on-death deeds for real estate and transfer-on-death registration for vehicles and securities. A will controls only what is left over. Beneficiary designations override the will, so an outdated form naming an ex-spouse can send an account to the wrong person.

The executor's job

An executor is a fiduciary: they must act in the beneficiaries' interest, keep estate money separate from their own, keep records, and avoid self-dealing. The executor is normally entitled to a fee and to reimbursement of expenses, and can hire a lawyer paid from the estate. An executor who mismanages the estate can be removed and held personally liable.

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Debts after death

Debts are paid from the estate, not by the family. Children do not inherit a parent's credit card debt, although a co-signer or joint account holder remains liable, and spouses in community property states may be responsible for some debts. If the estate does not have enough to pay everyone, state law sets the order of priority, usually starting with funeral costs, administration expenses and taxes.

How long and how much

A simple estate commonly takes six to twelve months, driven by the creditor claim period. Contested estates, or those with businesses, property in several states or unclear heirs, can run for years; real estate in another state usually requires a second “ancillary” probate there. Costs run from a few percent of the estate upward; some states, such as California, set statutory fee schedules, others use reasonable-fee standards. Most states offer a small-estate affidavit or summary procedure below a dollar threshold, which avoids formal probate altogether.

Where disputes come from

Will contests on grounds of lack of capacity, undue influence, fraud or improper signing; disputes over an executor's conduct; and claims by omitted spouses or children. Deadlines for contesting are short — often measured in weeks or a few months from notice.

When to get help

A probate lawyer is most useful when there is real estate, a business, debts that may exceed assets, family conflict, or no will. For small, simple estates, many courts publish forms and self-help guides.

Probate and taxes

Most estates owe no federal estate tax, because the exemption is in the millions of dollars per person, and married couples can combine theirs. About a dozen states and the District of Columbia have their own estate tax with much lower thresholds, and a few states impose an inheritance tax on the people who receive property. Separately, the executor must file the person's final income tax return and, for estates with income during administration, an estate income tax return. Inherited property generally receives a stepped-up tax basis equal to its value at death, which reduces capital gains tax if the heirs later sell it.