How To Probate a Will
Diary of an Anonymous Funeral Planner - Chapter 12
This is the 12th of a series written by an anonymous man caught unprepared in the expensive web of “death care” in the United States.
It turns out that funeral directors and cemetery owners aren't the only ones who take financial advantage of those who have lost a loved one and, in the midst of grief and turmoil in their lives, aren't sure what it expected of them when their family member dies. Lawyers, and an entire court system, are also eager to cash in, I found.
Fortunately, I caught myself this time and avoided the immediate temptation to blow more $2,500 on lawyers’ fees and court costs in order to get legal access to the $20 that was in my father's bank account when he died. Based on what other friends had told me, I just sort of figured that all wills had to go through the “probate process” before an heir can legally sell any property or collect any inheritance. And I didn't find anyone who discouraged that belief for several weeks. (In fact, out of fear of “giving legal advice,” a woman at the courthouse refused to give me a form that I would need to file a probate application on my own. “You'll have to ask an attorney for the application. We can't give them out here. You are the first person who has ever asked me for one. The attorney's always handle that,” she said. This was about a month before I discovered that Dad's will did not require probate at all.)
When I realized that my father's estate amounted to nothing more than his house, a very meager amount in the bank, and 600 shares of a restaurant chain's stock, I began to look into this “probate” idea more closely. I ended up paying a lawyer $75 for a half hour of hearing him confirm everything I'd already discovered on my own, but that's far less than what my family blew away to the cemetery and funeral home (see previous editions of this series. We spent at least $10,000 more than we should have.) But maybe this article can help you avoid even spending that much. (I suppose I do reluctantly advise you to consult an attorney about your individual case. But, unless you've got extremely complicated circumstances, I can't see the conversation lasting more than an hour, and just about any licensed attorney can confirm that you're on the right track. There are plenty of young attorneys who are well trained and qualified to give you guidance –without necessarily doing the expensive leg work for you – for about $50 an hour (or maybe even less, if they happen to be a friend of the family).
Here's what I learned:
What is Probate
My mother and I were at a breakfast restaurant together one morning commiserating over all the expenses we'd seen so far as a result of Dad's death, and we were not looking forward to spending even more money to send Dad's will through our state's probate system. Fresh off our sour experience realizing that we'd spent at least $10,000 more than necessary at the funeral home and cemetery, we didn't relish spending yet another $1,800 (the amount my mother's attorney quoted her) to send the will through probate. So we began to discuss ways to do the probate on our own.
As a journalist, I've always been one to go the “do-it-yourself” route as much as possible when it comes to dealing with the government. My reading of history and the constitution of the United States leads me to the conclusion that the founding fathers of our country (and especially the founders of my state) wanted the common man – who did not care, or could not afford, to do the hire legal representation to be able to navigate through the government's systems, reasonably, in a common sense manner as his own representative. Lawyers as we know them today, I'm convinced, were not part of the big picture that Thomas Jefferson and his contemporaries were working for. So, while I figured it would be more challenging that most people have the tolerance for, I was also quite certain that probate was do-able without an attorney's formal help. My idea was that my mother and I research the process ourselves and hire an attorney only for advice, as needed, but not to do any of the work for us. Mom agreed.
But neither of us have spent a day in law school. So we weren't sure of where to begin.
My suggestion as the word-geek in the family: let's start by look up the definition of “probate,” and see if that leads us somewhere.
Sure enough, when we searched a few websites that laid out the basics of probate, we discovered that, basically, probate is fancy legal word for the system by which a will is investigated and found to be legitimate. It gives formal assurance to banks, for example, that those who claim to be heirs to a person's estate have legal authority to the money and property they claim.
Armed with that basic bit of information (and, for us, inspiration) Mom and I quickly realized that we probably wouldn't need to go through the hassle of probate anyway. Probate is simply not needed in cases like my father's will – and I daresay a bunch of people who go through probate probably don't really need to.
When is Probate Necessary
Probate is necessary when an estate is complex – involving many layers of mortgages, bank accounts, stocks & bonds, and even multiple heirs.
In other words, except for the wealthy – who are used to spending fortunes on lawyers to do their business work – probate is rarely really necessary. Especially when a little care has been taken in advance of a death to assure that the heirs can proceed without the process. Fortunately, my father had some of that foresight (or at least a lawyer friend of his helped him to develop that foresight. I'll get to that story in a bit. For now, I'll just say it's true that not all lawyers are as bad as the stereotype would suggest – especially when it comes to helping their friends).
After understanding what probate is, my mother and I began to develop a suspicion that we wouldn't have to go through the process in my father's case. But, as I say above, we didn't get much encouragement in the quest to go it alone.
Aside from the woman at the courthouse who refused to give me a probate application that I could complete and submit to a judge, many friends advised us both to seek legal counsel in this matter. “A probate attorney will get everything done right. There won't be any stone left un-turned. It's probably worth the expense, just to make sure nothing comes back to bite you, ” more than one friend cautioned.
But, fortunately, we knew better – or, actually, we discovered better after fending off several bouts of temptation to just go ahead and turn the matter entirely over to an attorney.
Dad's case was simply not complex enough to warrant needing a probate court's involvement. (Ironically, it was simple enough that the courts and lawyers could not be counted upon to discourage it. They love cases like my father's. The court, for example, gets the same $300 fee (at least that's the rate in my state) no matter the complexity. If a case requires less than 10 minutes of a judge's time for that kind of money, there is no way the court system is going to discourage someone from partaking in those particular legal festivities.)
Next, the story of precisely why probate wasn't necessary in Dad's case.
When is it Not Necessary
As I mentioned parenthetically above, Dad's checking account had very little money in it. But that didn't stop a woman who worked at the bank from telling me that she'd need a copy of the probated will before she could give me the $20 that remained in it.
She spoke so matter of fact about the probate process that I just assumed it was legally required of everyone no matter the size of the estate. I assumed I'd need the probate ruling from a court in order to get approval to sell my father's house – or even to legally rent it or to sell or give away anything inside.
I also foolishly assumed that I'd be required to present a probated will to the insurance company that apparently held a $2,000 life insurance policy that had been given to Dad complimentary by his bank.
So all that's what sent me off in search of the probate process.
Finally, during my two months of investigation into what the probate process is, I ended up in an attorney's office complaining that it looked as if I would have to spend $2,500 in order to collect $2,020 from my Dad's insurance and his bank account. (I didn't mention the house in that complaint because, by then, I had already discovered Dad's smart move that would prevent me from having to go through probate to take ownership of the home. I'll explain that story later.)
The lawyer set me straight with a chuckle. “Unless your dad made the unusual move of not naming a beneficiary on his insurance policy, you probably only need your government ID to get your $2,000,” he said.
Slightly embarrassed at my naivety, I went back to the bank to seek help in filing an insurance claim as Dad's official beneficiary. That was no problem, of course. Gee whiz, I thought. I wish someone had just told me that a few weeks earlier.
But, while I was in the bank representative's office, I mentioned that I wouldn't be going through the process for my Dad's will, and, if that meant forfeiting $20 – that I assumed would end up in some sort of coffers of my state for perpetuity – so be it.
The woman laughed – just like the lawyer did – and said, “If you'll let me have a copy of your father's death certificate, I'll be right back.”
I gave her a copy, and she returned to the office 3 minutes later with a check for $20.20, the remaining balance in Dad's account.
“For small balances, we rarely require that a person go through probate,” she said. “Especially if there is no reasonable question as to who the rightful heir is.”
I wish someone had told me that a few weeks earlier, I thought. Wow. That thought occurred to me once before. Interesting.
Now to the story about Dad's house: in talking informally – in other words, without charge – to several other professionals over the next few weeks, I discovered that Dad's house was, magically, already in my name. How did that happen? Dad mentioned his house to a friend one day several years before he die, and it turned out the man was a retired attorney who loved to swim with my father at the YMCA every morning. He happily agreed to file a new deed on the house, which listed me as the co-owner. I was never made aware of this transaction, and I certainly didn't sign anything to accept the home. So, it did not affect my assets (or my tax bill) in any way.
This is apparently a move that many people make – assuming they have good, trustworthy, relations with their children – late in life. And it certainly helps the heirs to avoid the expensive cost of probate (to my knowledge, the attorney donated his services for this routine transaction, out of gratitude to my father for his friendship).
Alas, that leaves one bit of difficulty that I now face having made the decision to proceed without the expense of probate: Dad's 600 shares of stock.
Before Dad died, he had given me complete power of attorney over his financial affairs, and, it turns out, that's when I should have acted on the stock. Armed with the POA document, I could have asked a stock broker to do whatever I asked with that stock – and Dad always told me that he intended for me to have that stock as a gift from him.
But the day Dad died, the POA legally expired, too.
So, while I have not tried, I am certain a stock trading company would find great legal difficulty in releasing his stock to me without a probated will. The stock, as best I can figure, is worth about $1,000. I doubt I'll invest in the probate process to get it.
But, as I say, I've not tried to get the stock. When, or if, I do, it is possible I will find another policy of leniency in regard to small balances. Who knows. It can't hurt to ask. Well, that saying is a bit of a misnomer: in this day of telephone customer representatives (Dad's stock broker is one of the big national chains that have few local offices, certainly not one in my hometown) and automated phone lines, this project might not be good for my blood pressure. But I'll probably try eventually, just for grins. In the meantime, I'm resigned to the idea that I've lost this gift Dad intended for me. And I'll advise all other people who have Power of Attorney for their parents to get their elders out of the stock market as soon as possible. Just sell the stock for whatever you can get, and put the money in a savings account for which you have joint ownership and have been assured by bank managers you can have access to even after the death of your charge. That's the advice I wish I would have taken anyway.
Tips for Avoiding Probate
Aside from the tip I just wrote regarding the sale of stock shares for anyone to whom you have power of attorney, I have a couple of other suggestions for anyone wishing to help their relatives avoid the expense and hassle of going through a probate court upon his or her death:
First, discuss this issue with your banker. Make it clear that he or she knows who your heirs are and what your intentions are for your money. Then ask him or her to set up your account(s) so that your wishes can be carried out without the involvement of courts. Any reputable bank can set up such a plan and will be happy to do so as a free customer service – in order to continue the privilege of keeping your money in their accounts. All it takes is a phone call or a visit and an afternoon or so of rounding up signatures.
The next thing I'd recommend is something along the lines of what my father's friend/attorney did for Dad's house: get it legally registered in your heir’s name. While this was done for my father by a lawyer (as I say, at no cost), I've been told that a lawyer was not necessarily required for the transaction. A simple visit to the courthouse in your county will probably suffice to do something like that – or at least it's worth a shot.
The bottom line to all of this is this: do not be fooled into believing that the expensive probate process is a legal necessity with every person's death. My story is proof that it is not. Even if you're told that you don't have other options, the truth is, probably, that you do.
Continue To Chapter 13: Assure your Family knows your Burial Plans