What is probate?
Probate is the court process of changing the title on an asset when someone passes away. Real estate, bank accounts, and investment accounts owned in a person’s individual name at death which do not have a beneficiary designated are examples of assets that need to be probated. The term probate is often used to describe the process of administering someone’s estate after death. This typically entails marshalling the probate assets, paying debts, taxes and expenses, and ultimately distributing the estate assets to the beneficiaries entitled to receive them.
How much does probate cost?
The cost of probate will vary depending on many factors. Some of the factors that impact the cost of a probate proceeding include:
- The type and number of assets in the probate estate
- The number of heirs/beneficiaries and whether or not they are cooperative
- Whether the estate includes assets that must be formally valued or appraised – such as real estate, valuable collections, antique vehicles, etc.
- Whether real estate will be sold and whether the Court must grant a license to sell the property
- Whether creditors’ claims are filed against the estate that need to be evaluated and negotiated, including an estate recovery claim by MassHealth for benefits paid to the deceased during life
- Whether there is real estate located in multiple states, which will require ancillary probate proceedings in those states
- Whether a formal final account will be prepared and filed
All of these factors require additional attorney time and add to the cost of probate.
In addition to attorneys’ fees, there are filing fees to be paid when documents are filed with the Court, the requirement to publish notice in the newspaper at various stages of the probate process, asset valuation fees, fees for certified copies, and other costs.
How long does probate take?
A typical probate proceeding takes about a year from the date of the deceased’s death. Creditors of the deceased (those to whom the deceased owed money at the time of death) have a year from the date of death to make a claim against the estate seeking payment of the amount owed to them, and to then file suit against the estate if the claim is not allowed. Because of this one-year claims period, it is usually inadvisable for a Personal Representative to distribute the estate assets until this period has passed. However, assets can be partially distributed prior to the end of the one year claims period if there are sufficient assets to pay known claims.
It can take two to four months at the start of a probate proceeding for the Court to appoint the Personal Representative. If a formal account will be filed at the end of a probate proceeding, it can take any number of months for the Court to review and approve or “allow” the account after it is filed. A final distribution of estate assets is often not made until the account is allowed, which means the Personal Representative’s actions have been approved by the Court and they are relieved of liability.
Why avoid probate?
Delays, costs, aggravation, and loss of privacy are the primary reasons for avoiding probate. If an asset needs to be probated, that means no one will have access to that asset until the Court has allowed the probate petition and a Personal Representative has been appointed. A delay in being able to access money to pay expenses such as funeral costs or to make mortgage payments creates a difficult and aggravating situation for surviving family members who are trying to manage matters after someone has passed away. In Massachusetts, the probate court system is currently in serious disarray and delays are significant. Probate can be costly as there are typically attorney fees and court filing fees. Finally, probate is a public proceeding meaning that anyone who wants to snoop into the business of a decedent’s probate estate has the opportunity to do so.
How to avoid probate?
Probate avoidance is relatively easy. Assets that are owned jointly with another person avoid probate when the first joint owner passes away. For example, spouses who own their home as tenants by the entirety and their bank accounts jointly do not need to probate those assets when one spouse passes away; the home and bank account will belong entirely to the surviving spouse by virtue of being the surviving joint owner.
Assets that have a named beneficiary to receive them also avoid probate provided the named beneficiary survives the owner of the asset. IRAs and other retirement accounts, life insurance, and annuities typically fall into this category.
Assets that are titled in the name of a Trust also avoid probate.
How has COVID impacted the Probate Courts?
It is hard to overstate the impact COVID has had on the Probate Courts in Massachusetts. Although some counties have been impacted more than others, overall COVID has significantly slowed down the speed at which the Court is processing probate paperwork, which in turn has increased by many months the amount of time it takes to settle an estate in Massachusetts.
At present, it is taking about 3-4 months for a Personal Representative to be appointed after all necessary paperwork is filed. At the conclusion of an estate’s administration, if a probate account is filed, it is taking several months for the Court to review and allow the account, which impacts the final distribution of estate assets.
The delays are attributable to several factors:
- The number of additional deaths and therefore probates that have been filed as a result of COVID
- Court personnel worked from home for much of the COVID shutdown, and were slow to return to the Courthouses, delaying the processing of paperwork that was mailed to the Courthouses.
- The sheer volume of filings, coupled with the personnel issues, have led to an unprecedented slowdown in the probate process in Massachusetts due to COVID.
Despite the delays, the Courts have adapted more quickly than many imagined possible to COVID realities. “Virtual” court services were developed during COVID, including Zoom court hearings, and the ability to communicate with Court clerks and other personnel via email, phone and Zoom videoconferences. These new ways to communicate have made it possible to check on the status of probate matters during the COVID slowdown.