It is important to realize that changes may occur in this area of law. This information is not intended to be legal advice regarding your particular problem, and it is not intended to replace the work of an attorney.
What is probate?
Probate is a legal process whereby a court oversees the distribution
of assets left by a deceased person’s will. Assets are anything
a person owns with value, such as real and personal property and cash,
for instance.
When is probate needed?
Probate is not always necessary. If the deceased person owned bank
accounts or property with another person, the surviving co-owner often
will then own that property automatically. If a person dies leaving
very few assets, such as personal belongings or household goods, these
items can be distributed among the rightful beneficiaries without the
supervision of the court.
Sometimes probate is needed to:
- Clear title to land, stocks and bonds, or large bank or savings and loan accounts that were held in the name of the deceased person only, and put the title to these assets in the names of the rightful beneficiaries.
- Collect debts owed to the deceased person.
- Settle a dispute between people who claim they are entitled to assets of the deceased person.
- Resolve any disputes about the validity of the deceased person’s will.
What happens during the probate process?
The will is “proved” and delivered to the court. The deceased
person’s will can be proved by an affidavit made under oath by the witnesses
to the will. If such an affidavit is unavailable, the personal presence of
the witnesses will be required in court to testify that at the time the will
was signed, the deceased person was of sound mind and knew what he or she was
doing.
A personal representative is selected. A personal representative is
someone who handles the deceased person’s affairs. A will generally
names a personal representative who, if willing to serve and otherwise
qualified, will be approved by the court. If a person dies without
a will, the court will select the personal representative, usually
the spouse, an adult child or another close relative. If none of those
people are available or willing to be the personal representative,
the court may choose a bank, trust company or lawyer.
A notice to creditors is published in a local newspaper. This public
notice to creditors tells the creditors that they have four months
to bring any claim against the estate for debts the deceased person
owes them. The personal representative also gives written notice to
all known and possible creditors.
The heirs and people named in the will are notified of the probate
proceeding.
Assets are identified and an inventory is prepared and filed with the
court. The personal representative works to identify and value the
deceased person’s assets. Depending upon the type of assets and
the kind of records left by the deceased person, this step can be quite
straightforward — or more difficult and time consuming.
Debts are paid. The personal representative ensures that creditors
are paid. Creditors must be repaid from the estate before the remaining
estate assets can be distributed to the rightful beneficiaries.
The personal representative prepares state and/or federal tax returns
and any inheritance, gift and estate tax returns and pays any taxes
due.
The personal representative prepares and submits an account to the
people named in the will, the heirs of the deceased person and the
court.
The account shows all money paid out from the estate and all money
collected by the estate. It also contains a narrative explaining the
important actions taken in connection with the probate of the estate.
After court approval of the account and payment of all unpaid probate
expenses, the deceased person’s assets are distributed to the
people and entities (such as charities or trusts) named in the will
or, if the person died without a will, to the heirs of the deceased
person.
What is a “small estates” proceeding?
Oregon allows an abbreviated procedure for handling small estates that
would otherwise require a full probate. If an estate fits in this category,
the cost and time for distributing the estate assets may be greatly reduced.
The procedure involves filing a document called an “affidavit of claiming
successor.” This abbreviated procedure can be used if the estate’s
personal property is valued at no more than $50,000 and real property is valued
at no more than $150,000, for a total aggregate estate value of no more than
$200,000. Real property includes land and buildings or structures placed on
land, such as houses, commercial buildings and agricultural buildings. Personal
property includes all other property, such as cars, boats, clothing, stocks,
bonds and personal items.
How long does probate take?
Probate can be started immediately after death and takes a minimum of six
to nine months. If the estate includes property that takes a while to sell,
or if there are complicated tax or other matters, probate can last much longer.
A small estates proceeding can’t be filed until 30 days after death and
generally takes four to six months.
What are the costs involved?
Under Oregon law, a personal representative is entitled to a fixed percentage
of the value of the total estate. Extra costs may be approved by the court
for the personal representative and a lawyer, if the estate is complicated.
Other costs include court filing fees, legal notices published in the local
newspaper and any other necessary expenses. Lawyers generally charge an hourly
rate for their services.
Does probate mean more taxes?
No. Probate does not affect taxes that must be paid. For 2008, the first
$2,000,000 of an estate is exempt from federal estate tax, and the first $1,000,000
of an estate is exempt from state inheritance tax. Note that these amounts
are scheduled to change in 2009. Check with your advisor for details.
Do I need a lawyer?
Probate in Oregon involves a good deal of paperwork that must be filed
in a timely manner. To achieve the results you want, probate should be handled
with an understanding of the legal principles involved. A probate lawyer can
help you avoid the many possible tax traps and other problems that could arise.
Also, a lawyer can help you prepare and file the legal documents and prepare
you for hearings in court.
Legal Editor: Jessica Cousineau, April 2008