Welch Law helps guide families and loved ones in the legal areas of Probate, Estate Administration, Trust Administration, and Intestate Administration. While similar, each of these areas of law has its own unique challenges and concerns.
Probate is the legal process of a court overseeing the administration of a decedent's estate. The process ensures that all final bills and expenses are paid and that the remaining assets are properly distributed to the beneficiaries (or heirs) named in the will. If there is no will, or one cannot be found, distributions to beneficiaries are controlled by state law. This is known as "intestate" or "intestacy."
There are important steps the responsible party (sometimes called the "executor" or "personal representative") should take soon after the decedent's death. You can learn more about these steps here.
Once the executor or personal representative is identified, certain legal actions should be initiated.
Notify the Court:
If there are assets that must pass through the probate system, someone must notify the probate court. If the decedent left a Will, then the person named as the executor is normally the person who will present the Will to the court. If the decedent did not have a Will, then an interested party (usually a surviving spouse, child, sibling, or close family friend) will notify the court.
During this process of notifying the court, the person will normally also seek the court's approval to become the Administrator of the estate (a.k.a. executor or personal representative).
Administering the Probate Estate:
Assuming the court approves someone as the Administrator, then that person (or persons) will begin the administration process. This process starts with the submission of an inventory of all the estate's assets and debts. During the next several months, the Administrator will be responsible for collecting assets for the estate, managing estate assets, paying debts owed by the estate, and more depending on the nature of the estate's assets.
This person will typically work closely with several other advisors such as: attorneys, accountants, and financial managers.
Finalizing the Probate Estate:
Assuming all the assets have been collected, all the debts have been paid, and there are no disgruntled beneficiaries or other liabilities, the administrator will submit an accounting to the probate court. If accepted, this closes the probate case and distributions can be made to the beneficiaries.
If everything goes smoothly, the process typically takes 7-12 months to complete once the probate case is opened. However, it is not uncommon for difficult probate cases to take 2+ years to complete.
The Cost of Probate:
There are certain expenses the administrator can expect. These include: court filing fees, publication of the decedent's death in a newspaper, and legal and other fees charged by professionals. Many local attorneys will base their fees on an hourly basis or according to the fee schedule outlined in Missouri's Probate Code.
The following table outlines the statutory fees, as of March 1, 2019:
Size of the Estate: Minimum Statutory Fee:
Less than $5,000 5%
$5,001 - $25,000 $250 + 4% of amount over $5,000
$25,001 - $100,000 $1,050 + 3% of amount over $25,000
$100,001 - $400,000 $3,300 + 2.75% of amount over $100,000
$400,001 - $1,000,000 $11,550 + 2.5% of amount over $400,000
Over $1,000,000 $26,550 + 2% of amount over $1,000,000
Keep in mind, not all of the decedent's assets have to go through the probate process and therefore may not be subject to this fee structure. Assets with beneficiary designations, transfer on death or pay on death designations, may avoid probate completely.
Under Missouri law, some estates are entitled to a simplified "probate" process. Many estates with a total value under $40,000.00 will qualify for small estate processing. This process, if there are no disputes, is relatively quick. Depending on the decedent's county of residence, an attorney may not be required.
Regardless, many families still elect to hire an attorney to supervise and guide these small estates through the process. Some attorneys will offer a reasonable fixed fee to handle a small estate.
Trust administration is the process by which the trustee settles a decedent's estate. Many of the administrative actions will be similar to those in the probate process. For example, the trustee will still be required to collect assets, pay debts, keep beneficiaries informed of his or her actions, and distribute the assets.
However, unlike probate, estate administration of a trust is a private process. So long as no disputes arise, or other legal actions arise, the trustee is free to administer the trust at his or her pace (within reason).
Additionally, trust administration is typically less expensive than probate administration. The trustee does have a fiduciary responsibility to the beneficiaries, so care should be taken to ensure proper administration of the trusts assets.
Want to learn more?
Contact Welch Law to see how we can help.