What happens during the probate process?
Getting the ball rolling
A Petition is filed with the court, either requesting the court admit the Will to probate or open an intestate estate (probate without a will). The will is “proved” and the original copy delivered to the court. The deceased person’s will can be proved by an affidavit made under oath by the witnesses to the will. This is typically already done when the will is originally signed. If such an affidavit is unavailable, the personal presence of the witnesses will be required in probate court to testify that at the time the will was signed, the deceased person was of sound mind and aware of the circumstances.
A personal representative is selected. A personal representative is appointed by the court to handle the deceased person’s affairs. A will generally name 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 who is typically the surviving spouse, an adult child, or another close relative. Oregon law sets out a preference for who is next in line to serve. If these people are not available or willing to be the personal representative, the court may choose a professional fiduciary.
The heirs and people named in the will are notified of the probate proceedings.
Identifying Assets
Probate 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 probate assets. Not all assets are required to pass through probate. Only the assets without a surviving owner or designated beneficiary are subject to the court’s jurisdiction. In identifying assets, the personal representative typically becomes aware of non-probate assets. Depending upon the type of assets and the kind of records left by the deceased person, this step can be quite straightforward – or difficult and time-consuming.
Handling creditors
A notice to unknown creditors is published in a local newspaper. This public notice to creditors gives creditors a four-month window to present claims against the estate for debts the deceased person owes them. The personal representative also gives written notice to all known and possible creditors.
Debts are determined and eventually paid. The personal representative ensures that valid creditors are paid. Creditors must be repaid from the estate before the remaining estate assets can be distributed to the beneficiaries.
Addressing Taxes
The personal representative is typically required to consult with a tax professional regarding the decedent’s final income tax returns and any estate tax requirements. With the CPA’s assistance, the personal representative prepares the final tax returns on behalf of the decedent, including the individual tax returns, inheritance or estate tax returns, if necessary, and pays any taxes due from estate funds.
Closing the estate
Accounting to the court is the final step. The personal representative prepares and submits an accounting to the beneficiaries named in the will, or to the legal heirs if there is no will. The beneficiaries have an opportunity to object to the accounting or can waive their right to object to more expeditiously complete this final task. This accounting will also be submitted to the court for review and approval. The accounting shows all money paid out from the estate and all money collected by the estate. It also contains an explanation of the important actions taken in connection with the settlement of the estate. Attorney fees and costs, tax preparation fees, the statutory personal representative fee, reimbursement for out-of-pocket expenses, and other similar outstanding expenses are approved by the court for payment for estate funds at this stage.
After court approval of the accounting and all outstanding probate, expenses are paid, the deceased person’s assets are distributed to the individuals or entities named in the will or, if the person died without a will, to the legal heirs.
How long does probate take?
Probate can be started immediately after death and often takes between nine and eighteen months. In small estate probates, there is a 30-day waiting period before paperwork can be filed with the court. Small estate probate generally takes around six to nine months to complete.
Factors that can increase the time and expense of probate:
- Disputes among heirs or beneficiaries
- Real property that must be sold
- Individual stock or bond certificates that must be processed
- Complicated tax matters
What are the costs involved?
Under Oregon law, a personal representative is entitled to a fee for the work of settling the estate. This is set in Oregon as a fixed percentage of the value of the total estate. Sometimes the court will approve additional fees for extraordinary work by the personal representative. Out-of-pocket costs paid directly by the personal representative must be approved by the court. Other costs include court filing fees, legal notice fees for publishing in the local newspaper, and any other necessary expenses, such as appraisal fees. Attorneys and their support staff generally charge an hourly rate for their services, and all attorney fees and costs must be approved by the court before payment can be made from estate funds.