What Exactly Does the Probate Process Entail – the 10 Basic Steps of Probate

Submitted by Landon Reeves on Sun, 07/25/2021 - 14:38

This is a simplified explanation of the sequence of events of a standard probate. This process can vary greatly depending upon many factors and your circumstances may be different, but generally, this is the process you can expect. This explanation will not address the process if a Trust is in place because a Trust will generally allow the estate to avoid probate thereby making this explanation a moot point. To learn more about the differences between a Will and a Trust, visit our Blog titled “Estate Planning - Basics of Estate Planning (Wills vs. Trusts).”

Step 1 – Are there Probate Assets and is there a Will: The first step of probate is to decide if the deceased individually owned any probate assets. Probate assets are generally any of the following that were owned individually and not owned jointly with another person including:

  • Real property titled solely in the deceased individual’s name (vacant land, house, etc.);
  • Cars, trucks, boats, and basically anything with a title;
  • Any personal property such as jewelry, furniture, appliances, other household items;
  • Any interest in a partnership, corporation, or limited liability company;
  • Any individually owned money or bank accounts with no payable on death (POD) or transfer on death (TOD) designation;
  • Any life insurance, brokerage account, or retirement account with no beneficiary designation.

If there are no probate assets, then there is likely no need for probate. If there are probate assets in place, then the question becomes, did the person leave behind a Will or a Trust that will dictate who is to receive what assets and property.

  1. If the person left behind a Trust, then the process of administering and distributing the assets and property generally does not require court intervention and does not require the probate process;
  2. If the person left behind a Will, then the Will shall determine who will receive what assets; and
  3. If the person did not leave behind a Will, then the court and Arkansas law will determine who will receive what assets.

Step 2 – Assets and Liabilities: After determining if there are probate assets and determining whether or not the person left behind a Will, the second step of probate is to do an initial assessment of the estate and to determine what all does the estate entail. This process generally consists of obtaining an initial inventory and rough valuation of all assets owned and all debts owed by the deceased individual. It is important to learn what the estate is comprised of, the total value of the estate, and the total debts of the estate.

Step 3 – Personal Representative, Executor, or Executrix: After assessing the assets and liabilities of the estate, the next step is to determine who will serve as the person in charge of administering the estate on behalf of the estate of the deceased individual. This person is either referred to as the personal representative (if there is no Will), the executor (if the person to administer the estate is male and there is a Will), or the executrix (if the person to administer the estate is female and there is a Will). If there is a Will in place, it will generally name who is to serve as the executor or executrix. If there is not a Will, then the court will decide who will be the personal representative which can be a family member or other interested party. This is often a contentious point of probate when there are multiple parties who wish to serve as the personal representative. In determining who should have the right to serve as the personal representative, you need experienced representation because this is a crucial part of the probate process.

Step 4 – Petition for Probate: After determining who you wish to serve as the personal representative or who the Will appoints as the executor or the executrix (as the case may be), the next step is to file a petition with the probate court to open the probate case, to tell the court if there is or is not a Will, to provide the Will to the court if one exists, to ask the court to declare the Will’s existence and validity, to identify the heirs and interested parties, and to nominate a specific person to serve as the personal representative, the executor, or the executrix (as the case may be).

Step 5 – Letters of Administration (Testamentary): After the court determines who will serve as the personal representative, the executor, or the executrix (as the case may be), the court will then issue Letters of Administration (also referred to as Letters of Testamentary) which is the legal document officially declaring and authorizing that person to serve as the personal representative, the executor, or the executrix. The Letters of Administration (Testamentary) is the document by which third-parties (banks, financial institutions, insurance institutions, etc.) must acknowledge and recognize as being a lawful and valid document granting the personal representative, the executor, or the executrix the legal authority to act and to receive information on behalf of the estate of the deceased individual. Effectively, the Letters of Administration is the key that will unlock the door to speaking with and obtaining information from any third-party with regard to the estate of the deceased individual.

Step 6 – Notice of Publication: After opening probate and obtaining Letters of Administration, the next step is to notify the Department of Human Services (Medicaid) and any known creditors of the deceased individual by publishing a notice of probate in the local newspaper and said notice must run once a week for two consecutive weeks. This first date of publication will trigger what is known as the six-month claim period.

Step 7 – Six-Month Claim Period: Under Arkansas law, there is a mandatory six-month period by which creditors have the ability to bring any valid claim or debt against the decedent or the estate. Effectively, the first date of publication of the notice of probate triggers a six-month clock and for six months after the first date of publication, a creditor or claimant can file a claim against the estate for any debt owed by the deceased individual. If a creditor does not properly file their claim for the debt allegedly owed by the deceased individual within the six-month claim period, then that claim is forever barred and the estate is not liable for that debt with that creditor. After the end of the six-month claim period, the estate will then ascertain what claims have been filed against the estate and it will settle any valid, duly filed claims.

Step 8 – Accounting and Taxes: During the six-month claim period, the estate will need to do a final accounting of all assets, disbursements, expenses, and liabilities of the estate. The estate will also need to determine if a final individual or estate tax return must be filed and if so, it will need to have said tax return filed with the IRS and the state of Arkansas.

Step 9 – Petition for Accountings and Distributions: After the estate has completed the necessary accountings of the estate, filed the necessary taxes of the estate, and paid all necessary debts and claims of the estate, it is then ready to file with the court a petition for accountings and a petition for distribution. The petition for accountings and distributions serves the purpose of showing the court that the estate has properly managed the assets, it has properly paid all debts, claims, and taxes of the estate, that is has followed Arkansas law on probate administration, and that it is now ready to sell or distribute the property of the estate. At this point, the court will determine if all proper and necessary steps and requirements of probate have been met. Upon the court’s approval, the accountings will be settled and the estate will be ready to sell or distribute the assets and property of the estate (probate assets) to the heirs of the estate either according to the terms of the Will (if a Will exists) or according to the Arkansas laws of intestacy if there is no Will.

Step 10 – Close Out the Estate and Discharge the Personal Representative, Executor, or Executrix: After the estate has met all necessary requirements of probate under Arkansas law and after all of the probate assets of the estate have been distributed, the estate will then file a petition to close the estate and discharge the personal representative, executor, or executrix. This is the final step of probate and this serves to close out the probate estate.