Probate is a court procedure where the validity of a will is proved or disproved. It involves all estate administration proceedings. When a person dies, all property, other than property passing directly to others (such as property held in joint tenancy, life insurance proceeds and retirement plans payable to a named beneficiary), may be subject to a probate proceeding. An estate is generally probated in the county where the deceased owned property. If property is located in another state, additional proceedings are sometimes necessary in that state.There is no natural right to inherit property. This right exists solely as granted by statute. The law provides for the probating of estates to protect all interested parties.
Why is probate necessary?
- To determine if the deceased left a valid will.
- To appoint an executor or administrator (surviving spouse, adult child, bank or trust company) to administer the estate of the deceased.
- To collect and determine all property and assets of the estate.
- To protect the property of the estate.
- To provide a method of converting assets to cash for distribution to beneficiaries or payment of creditors.
- To pay existing taxes and debts in a timely manner.
- To determine those entitled to share in the estate and to distribute the property to the proper parties.
- To transfer legal ownership of real estate and other property.
- To keep ongoing businesses running smoothly during the transfer period.
- To extend the court’s protection to the person who settles the affairs and distributes the property of the deceased.
There may be special circumstances where all persons interested in an estate, by agreement of the parties and after review with their lawyers, conclude that formal probate proceedings are unnecessary. However, anyone who deals with the deceased person’s property without qualifying as an executor or administrator can be held personally liable for his or her conduct and should be fully advised by counsel before acting.
What is involved?
The will usually names an executor to manage the estate assets. If there is no will, the court will appoint an administrator. The executor or administrator, normally under the guidance and direction of a lawyer, is personally responsible for the proper handling and settlement of the deceased person’s estate.
The executor or administrator will usually be required to:
- Notify heirs and creditors of the probate proceedings.
- Take possession of, inventory and preserve the probate assets of the deceased.
- Collect all income, such as rents, interest and dividends, demand and collect all debts, claims and notes due.
- Manage the business of the deceased.
- Determine the names, ages, residences and degrees of relationship of all heirs and next of kin of the deceased.
- Complete any pending lawsuits in which the estate of the deceased has an interest.
- Determine, prepare returns for and pay all state and federal inheritance, estate and income taxes.
- Pay the valid claims of creditors of the deceased and, when necessary, sell property to raise funds to pay claims, taxes, and expenses of administration.
- Transfer a deceased’s title to real and other titled property to his or her heirs.
- Distribute all remaining assets to the proper persons.
Probate procedures in Missouri and Kansas are not complicated, but they require some experience. To achieve the desired results they must be handled with an understanding of the underlying legal principles. These proceedings may require preparing and filing numerous legal documents; giving or publishing notices; holding court hearings; securing appraisals of property, preparing income, gift and estate tax returns; providing an accounting of funds; distributing property and securing the final discharge of the executor or administrator by the court.
What is the role of the court?
All probate proceedings are subject to the jurisdiction of the district court. With the exception of certain actions, estates administered under the Simplified Estates Act and Informal Administration Act, the acts of the executor or administrator are subject to the scrutiny and approval of the court. Final determinations are made by the court including payment of debts that exceed $1,500, lawyer fees, executor or administrator fees, and orders of final distribution of the assets. Juries are not used in probate matters.
How long does probate take?
The initial step, filing a petition, must be completed within six months after the date of death. Appointing an executor or administrator usually takes four to five weeks from the date the petition is filed.
Since the problems of each estate differ, no accurate time schedule can be given for the length required to probate the estate. However, no estate with assets amounting to more than the legal allowance and debts, taxes and costs may be closed before six months after the date of death. Persons having knowledge and access to a will may offer it for probate at any time within six months following the death. Creditors have four months after actual notice to file claims against the estate. The filing of state and federal death tax returns may be required and tax payments are due no later than nine months after the date of death.
What property is not included in the probate process?
Not all property owned by the deceased is subject to probate. For example, life insurance will pass directly to the designated beneficiary and does not require probate unless the beneficiary is the insured’s estate or executor. Title to joint tenancy property with right of survivorship pass automatically to the surviving joint tenant(s), subject to possible tax liability. A bank account with a “pay on death” provision will pass directly to the named party. Transfer on Death provisions are available with respect to securities, titled vehicles and real estate. Property not subject to probate will not pass under the person’s will, which may impair or destroy the deceased person’s wishes regarding disposition of his or her property.
What taxes are involved?
Every estate may be subject to two types of death taxes, depending on the total value of all assets including the taxable estate and to whom the assets pass. The taxable estate is not the same as the probate estate. The taxable estate includes both probate and non-probate assets.
One type of death tax is the federal estate tax, based on the value of the assets in the taxable estate. The federal estate tax is a graduated tax that is levied on the net estate after allowing for certain deductions and exemptions. The exemptions are large so many estates will owe no tax. You should consult a lawyer.
The second type of death tax is the inheritance tax. This tax is based on the value of the assets received from the deceased and the heirs’ degree of kinship to the deceased. However, an inheritance tax may be payable even though no federal estate tax is due.
Another tax is the federal and state fiduciary income tax that is based on income and expenses generated from the probate estate assets. This tax is very similar to the federal and state personal income tax.
The obligation to prepare and file tax returns and pay the appropriate tax liability may exist even if the deceased left no probate estate. This is due to the fact that jointly held property, life insurance and certain types of transfers by the deceased prior to death are subject to taxation by the state and federal governments. Due to the complexities involved, an executor or administrator should not attempt to draft the necessary returns, compute the taxes due nor meet the necessary filing requirements without the supervision and guidance of a lawyer.
Real estate cannot be transferred with clear title after the death of an owner or co-owner without obtaining an Inheritance Tax Waiver, which is filed with the Register of Deeds in the county in which the property is located. The only exception from this requirement is when the deceased died more than 10 years before the transfer.
What are the fees and costs?
The fee of the executor or administrator and lawyer are not fixed by any law or court rule. They must reflect the fair value of the services actually rendered in relation to the size of the estate. The fees of the executor or administrator and lawyer are subject to the approval of the probate court.
The estate administration costs include court costs which are set by law, publication costs, and bond premiums if a bond is required by the court.
Missouri has statutory which may award fees depending on the value of the estate.
What about small estates?
The laws of Missouri and Kansas provide that when the deceased leaves a spouse or minor children, a simplified proceeding may be used when:
- the estate is made up entirely of personal property
- the estate does not exceed the amount of exempt property
- the estate does not exceed the maximum family allowance of $25,000. It’s called a “Refusal to Grant Letters of Administration.” This proceeding can also be used by a creditor where the deceased person’s estate consists of real and personal property that does not exceed $25,000 (in Kansas) and when there is no claim for family allowance by a surviving spouse or minor children. Missouri has similar procedures for estates which do not exceed $40,000.
The availability of the “Refusal to Grant Letters of Administration” process (in Kansas) can be determined by the lawyer and the executor or administrator at the time of the initial conference. Probate can be avoided if the estate contains no real property and the value of the estate is less than the total value of all demands against the estate. Any person possessing a will may then file it with an affidavit. If assets are discovered later, the will can then be probated and the assets distributed according to the will. If the deceased had no will and left only real estate to the surviving spouse and other family members, a “Determination of Descent” proceeding (in Kansas) may be instituted at any time six months after death. This proceeding takes about 30 days to complete and is often used when reasons to probate administration do not exist. Similar procedures are available in Missouri.
Even if a “Refusal to Grant Letters of Administration” or a “Determination of Descent” proceeding is used, there may be Inheritance Tax and federal estate tax filing requirements.
What should be done?
If someone close to you has died, it is suggested that nothing be done to disturb any of the property of the deceased unless it is necessary to protect it from being lost or destroyed. Shortly after the death, a lawyer should be contacted to discuss the matter with those close to the deceased. In general, the surviving husband or wife should make the initial contact if he or she resided with the deceased. In other situations it is recommended that the closest relatives contact the lawyer.
The lawyer will provide advice, determine whether probate proceedings will be required, and explain the procedures involved. If you possess a will of a deceased person, you should give it to the lawyer at the first consultation.
Attending to the details of a probate proceeding may be a complex, time-consuming task, and it may be necessary for relatives or close friends to face this task in a time of grief and trauma. A lawyer has the technical expertise to smoothly handle the necessary legal procedures and relieve the bereaved of this burden. Please contact us if we can help.