By Attorney Maria Baler

Several misconceptions are often associated with the word “probate.” Many assume a legal matter must be complicated or problematic if it goes to probate court. However, probate is simply a legal term to describe the process of administering an estate after a person has died.

A deceased person may leave a variety of assets, such as bank accounts, real estate, retirement accounts, life insurance policies, stocks, bonds, or mutual funds.  These assets are either probate or non-probate assets. Simply put, probate assets are those that were owned by the deceased in his or her name alone, requiring the court to supervise the proper distribution of those assets to the heirs. 

Here are five facts to help you better understand the probate process.  

1. Probate is not required for every estate.  Probate is only required if the deceased person owned “probate assets” at the time of death - assets owned by the deceased person in his name alone.  Examples of non-probate assets are jointly owned property, accounts held by the deceased person as a "trustee" for another person or payable upon death to another person, assets held in a trust, or assets that name a beneficiary to whom the asset is payable upon the death of the owner (such as life insurance or retirement accounts).  Non-probate assets pass automatically to the surviving joint owner or to the beneficiary designated, without being subject to the probate process.

2. "Probate" is the Probate Court proceeding that may be required following a person's death if she owned probate assets.  During a probate proceeding, the deceased person's Will is approved by the court.  An executor is appointed who has the authority to take control of the deceased person's probate assets, pay debts, expenses, and taxes, and distribute the remaining probate assets to the beneficiaries as specified in the Will.  If the deceased person died without a Will, a similar probate process takes place, and an administrator (rather than an executor) is appointed to distribute the assets to the heirs as specified by Massachusetts law.

3. A deceased person's Will only controls his probate assets.  In general, only probate assets (owned by a deceased person in his name alone) are distributed under the terms of his Will.  Non-probate assets will be distributed based on the ownership of the asset or the beneficiary designation.  For example, assume the deceased owned a house and stock in his name alone, and also had a joint bank account with his son and a life insurance policy that named his favorite niece as beneficiary.  His Will left all of his assets to his wife.  However, his assets would not all be distributed to his wife.  The deceased’s wife would receive all of the “probate assets” (the house and the stock) after debts, expenses and taxes were paid.  The joint bank account would pass to his son as surviving joint owner, and the life insurance policy would be paid to his niece as beneficiary, because these are not "probate assets." 

4. There are specific rules and time frames that creditors must comply with in order to be paid money owed to them by a deceased person.  If a deceased person owed debts at the time of his death, the law proscribes a procedure that most creditors must follow to be paid from the deceased person's assets.  This process generally requires a creditor to file a claim and a lawsuit against the estate within one year of the deceased person's death if they have not been paid before that time.  If this process is not followed, the estate is not legally obligated to pay the creditor in most cases.

5. Probate may be worth avoiding or not, depending on your goals.  Probate Court files are open and accessible to the public.  Currently, attorneys' fees and court filing fees can make probate an expensive process which can take a year or more to complete.  In most cases it is possible to avoid probate with proper planning, although it is not necessary or advisable in every case.   In July 2011, changes to the probate process in Massachusetts will take effect under the new Massachusetts Uniform Probate Code.  The new rules will introduce an informal and less supervised probate process that may be used by certain estates if all of the parties involved agree.  The new law is intended to reduce the delay, expense and public nature of the probate process. 

Estate planning can help you achieve your goals for distribution of your assets at death, including partially or completely avoiding probate. Creating a proper estate plan with an experienced estate planning attorney should be a priority for those who want to ensure their wishes are carried out and their estate is settled in an efficient and cost-effective manner.

Attorney Maria Baler is an estate planning attorney and a partner with the Dedham law firm of Samuel, Sayward & Baler LLC. She is also a director of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA).  For more information, visit www.ssbllc.com.