Probate is the court supervised process created to settle the affairs of a person who has died (the decedent) and for the orderly transfer of the decedent’s property to the rightful heirs or beneficiaries. It includes establishing the validity of the decedent’s Will (if there is a Will), appointing a personal representative/administrator to manage the estate, inventorying the decedent’s property, paying debts and taxes, and distributing the remaining property to beneficiaries. Typically, the decedent’s estate must go through the probate process even in the event that the decedent died without a Will. The process also limits the amount of available time creditors have to file claims against the estate and collect debts of the decedent. If the decedent died with a Will, it is said the decedent died “testate” where if the decedent died without a Will, the decedent died “intestate”.
- How does the probate process work?
- Meeting with an Attorney and steps taken in probate
- What is the role of the Court during the probate?
- How long does probate last?
- How much does probate administration cost?
- Small Estate Affidavit
- Non-Probate Notice to Creditors
How does the probate process work?
The probate process protects the decedent’s property, identifies heirs and beneficiaries, identifies creditors who may have a claim against the estate, and determines the individuals and entities entitled to assets of the estate. During the probate process the personal representative pays all debts, expenses, taxes, and claims; and distributes the property of the estate. In Washington this is typically a straightforward process. Unfortunately there are some exceptions, for example if there are problems with the Will. The information provided here is a very general, brief overview of the probate process in Washington and how an attorney may work with a client to administer the estate.
The initial stages of dealing with the loss of a loved friend or family member can be a difficult, stressful and sorrowful time. Our office will do everything we can to help you through the legal procedures that are involved in settling the affairs of the decedent; this is usually done through the Court by Probate.
Certifying the Last Will and Testament
A valid Last Will and Testament will help determine the person with legal authority to act as the personal representative of the decedent’s estate, the beneficiaries of the decedent’s estate, and the disposition and transfer of the decedent’s assets.
With a valid Will and a qualified personal representative, the Probate process is usually administered without Court supervision and the personal representative is issued with Non-Intervention Powers. However, there are circumstances when this may not be the case and the Court will not grant such powers and the Personal Representative may have to apply for a Personal Representative Bond and request Court approval for estate activity.
Probating an Estate Without a Last Will and Testament
If the decedent passed without a Will, the Administration of the Estate will take place through the Court. Probate, in this situation, can be more time-consuming and costlier. All of the decedent’s known heirs need to be identified and notified of the decedent’s passing. Depending on the timing of the filing of a probate, the heirs may need to agree upon the nomination of the Personal Representative of the estate. He or she, in turn, will require qualification from the Court before being issued with Letters of Administration. The distribution of the decedent’s assets to his or her legal heirs is made according to Washington state law.
Requirement to Prepare an Inventory
The personal representative is required to prepare an inventory of the financial, personal, and real property of the estate. If requested, a copy of the inventory is provided to the heirs or beneficiaries of the estate. By statute, the inventory is to be completed within three (3) months of filing the probate.
Dealing with Potential Creditors
We mail notice of the decedent’s death to the Department of Social and Health Services and to the Department of Revenue for the State of Washington, if applicable. It is important to determine how much, if any, money is owing to these government agencies.
Credit card statements, medical bills, utility bills, mortgage payment statements, County real estate property tax statements, car loan payment statements, are all examples of important documents to collect during the initial stages of the Probate process. We may mail Notice of the decedent’s death to any potential creditor; this requires the creditor to file a claim for payment of the debt with the Court within a four month time frame or forfeit their claim. During the Probate process, we will explore and discuss the best way to respond to any particular creditor claims.
Assets that exist outside of Washington State
Real property in another state, or in another country, will necessitate Probate in that state or country. This ancillary procedure provides for the distribution of assets per the “foreign” law of that jurisdiction. This adds another layer of legal work to the process; as well as additional time and costs.
Closing Probate
Once the distribution of assets has been finalized, and the debts of the estate dealt with, we may begin the process of wrapping up the administration of the estate. We accomplish this by obtaining a variety of different documents then file the necessary Closing documents with the Court.
If, for any reason, there are delays in the process that will extend the period of probate, then we will need to file an update with the Court called a Status Report. A wrongful death claim, prolonged litigation or difficulty with estate taxes may require us to submit a Status Report to the Court.
There are other means that provide for the distribution of the assets of the decedent which may be accomplished by filing a Final Report and Petition for Court Intervention Decree.
Meeting with an Attorney and steps taken in probate
Initial Appointment
The first appointment should be with the personal representative nominated in the Will. If the named personal representative is unable or unwilling to serve, or if there is no Will, the initial appointment should be with the surviving spouse, other family member or close friend. It is helpful if you bring:
- a copy of the Death Certificate
- the original Will (if any)
- a list of names, addresses, and dates of birth of family members
- a list of the decedent’s assets and liabilities
Second Meeting
Between the initial meeting and the second meeting, the attorney will prepare a variety of documents to be filed with the Court. The personal representative will sign these documents during the second meeting. The documents include:
- a request for the personal representative to be able to administer the estate, and to serve with non-intervention powers. That is, the personal representative will have minimal interference from the court during the administration of the probate.
- an Oath
- a court certificate certifying the Will (if there is a Will)
- an order appointing the personal representative
Court Appearance
The attorney will go to the Court to file the probate once the client has signed the documents noted above. During the court appearance, the court commissioner will review the request to sign orders appointing the client to administer the estate and allowing the client to serve with non-intervention powers. The Court will issue letters testamentary to the personal representative to provide legal notice to third parties of the personal representative’s appointment. The Courts also allow the attorney to mail or deliver the paperwork to the Court to open a Probate.
NOTE: If the decedent died intestate, the Court appoints an administrator for the estate. The duties of the administrator are essentially the same as those of a personal representative.
Notice to Creditors
The attorney will arrange for a Notice to Creditors to be published in the local paper once the personal representative/administrator has been officially appointed by the Court. Once the Notice to Creditors is published, creditors have four months to file claims. The estate can be closed after the four months if all other work related to the estate can be completed during that time.
In certain instances we may not need to file a formal Probate proceeding with the Court; instead we may file a Notice to Creditors proceeding. In this case we publish a Notice to Creditors and mail the Notice to all known creditors. This procedure serves to “cut off” a creditor if a claim is not properly presented within 120 days.
Client Work in Four-Month Period
During the four month period, the personal representative/administrator needs to:
- take possession of and inventory all assets of the decedent’s estate;
- determine the fair market value of all assets;
- set up an estate checking account;
- pay bills, collect dividends and interest, maintain insurance on assets, and supervise business interests;
- collect income such as rent and take steps to settle the decedent’s debts;
- set up bookkeeping, keep detailed, accurate records and accounts of all transactions affecting the estate.
Also the personal representative/administrator is required to make a reasonably diligent effort to ascertain all of the decedent’s creditors and give actual notice to all of those creditors that can be identified. The attorney will assist the personal representative/administrator in completing this task. When complete, the attorney will prepare a declaration for the personal representative/administrator to sign confirming efforts to identify and to notify all of the estate’s creditors.
Attorney Work in Four-Month Period
During this period, the attorney will provide notices to the heirs, the Office of Financial Recovery and the Department of Revenue for the State of Washington as required by statute. The attorney will work closely with the personal representative/administrator to handle the decedent’s liabilities and to create an Inventory of the decedent’s assets.
Taxes
The personal representative/administrator will want a CPA to assist in all tax matters related to the estate due to the possible complex issues.
A. Does the estate need to file a federal estate tax return?
If the decedent’s taxable estate exceeds his or her available estate exemption amount, a federal estate tax return must be filed. The taxable estate may be valued as of (1) the date of death; or (2) the alternate valuation date, which is the date exactly six months following the date of death, whichever date is more advantageous for the decedent’s estate. If a return is required, it must be filed within nine months from the date of the decedent’s death. In many cases, no estate tax is actually owed as a result of tax planning in the decedent’s will. Nonetheless, an estate tax return still must be filed.
B. Does the estate need to file a Washington State estate tax return?
If the decedent’s estate exceeds $2,193,000, a Washington State estate tax return may be required. Similar to the federal return, if a Washington return is required, it must be filed within nine months from the date of the decedent’s death.
C. Do I need to file an income tax return for the year the decedent died?
You will need to file an individual income tax return on behalf of the decedent for all income he or she earned from January 1st through the date of his or her death. This return will be due on April 15th of the following year.
D. Do I need to file an estate income tax return?
You will need to file an estate income tax return (known as a fiduciary income tax return, or Form 1041), for all income earned from the date of the decedent’s death through December 31st of the year he or she died. If the estate is not closed by the end of the calendar year, you may have to file an income tax return in the following year to report all income earned by the estate. The IRS, however, recognizes that the income from an estate may be minimal. If it does not meet a threshold each year, the estate will not be required to file an income tax return. For tax years ending before the second anniversary of the decedent’s death, the estate does not have to pay quarterly estimated income taxes. For tax years ending after such date, the estate must make quarterly estimated income tax payments similar to those required by an individual.
Personal Representative Fees
The personal representative is entitled to receive reasonable compensation for services as personal representative. The personal representative can opt to waive a fee. Regardless, the personal representative should keep a careful record of services completed. These records will be useful in determining the amount, if any, the personal representative may request as a fee. The personal representative should also keep careful track of his or her out of pocket expenditures and keep all receipts.
Distribution of Assets to Beneficiaries or Heirs
A final distribution to all beneficiaries/heirs can be made after the four-month period for creditor’s claims has expired, and all claims, taxes, and fees are paid. The distribution must be pursuant to the terms of the Will (if any) or the requirements of intestate succession.
Closing Estate
Once the final distribution has been made and a Declaration of Completion filed with the Court, the personal representative will be discharged, and the probate will close.
What is the role of the Court during the probate?
Probate proceedings are subject to jurisdiction and supervision by Washington superior courts. Typically probate proceedings are simple and require little court intervention. The Court’s involvement is necessitated when disputes arise or there is uncertainty as to the meaning of a document or the identity of a person entitled to a share of the estate.
How long does probate last?
Due to the uniqueness of each probate, it is difficult to precisely predict the time required to settle an estate. The earliest a probate could close is four months from filing the probate with the Court. Five to nine months is typical and nine to twelve months is common if the estate is more complex. Issues that can affect the length of a probate include the existence or non-existence of a Will, the size and value of the estate, the location of property if outside the State of Washington, and whether the Will is contested or not. If the estate is subject to state or federal estate taxes, the time period will be longer than one year.
How much does probate administration cost?
The costs vary based on the complexity of the probate administration. Fees and expenses to consider are the type of assets, claims by creditors, and the need to file tax returns. In addition the Court also charges a fee to file the probate. The current probate filing fee for all counties in the State of Washington is $240.00. Attorney’s normally charge on an hourly basis for their work on probates. In Washington, attorneys are not allowed to charge for their services based on a percentage of the value of the estate.
Small Estate Affidavit
This procedure may be used to transfer tangible and intangible assets of $100,000 or less (real property may not be transferred under a Small Estate procedure), per the decedent’s Last Will and Testament or, if no Will exists, distributions according to statute. The value of assets that would normally pass outside of probate and a spouse’s community property share is not counted in this amount.
A Claimant (beneficiary or heir) to the assets of the estate needs to approach the institution/person holding the assets, and sign and deliver an Affidavit and a certified copy of the decedent’s death certificate to the institution/person. There may be instances where the holder of the decedent’s assets (a bank, for example) may refuse to release funds this way, in which case we would need to petition the Court for an Order directing the bank to release the funds or initiate a probate.
Non-Probate Notice to Creditors
In certain instances, you may not need to file a formal Probate proceeding with the Court but yet you wish to publish notice to creditors in the newspaper. In that case, we can publish a Notice to Creditors and mail the Notice to all known creditors. This procedure serves to “cut off” a creditor if a claim is not properly presented within 120 days.