Probate is a legal process in which someone’s estate is settled after they pass away. Probate happens even if you leave a will with detailed instructions. A number of things happen during probate, including the creation of an estate inventory, the payment of outstanding debts and the distribution of remaining assets to the deceased person’s heirs. But after probate is closed, things work a little differently and the options at your disposal will change. It’s important to the ins and outs of probate if you’re the executor of someone’s will or a beneficiary of their estate, and a financial advisor may be able to help clear the air. Try using SmartAsset’s free advisor matching tool today to find advisors that serve your area.
What Exactly Does Probate Mean?
Probate involves the settlement of an estate after death. When someone passes away, their estate becomes subject to the probate laws dictated by where they live. An estate can be subject to probate regardless of whether there is a will in place or not. If someone dies without a will, they’re deemed intestate according to their state inheritance laws. If the deceased person named an executor for their estate in their will, this person has the authority to initiate probate. If not, then a member of the person’s family can open probate.
The specifics of what happens in the probate process can vary from state to state. But the most important steps include:
- Validating the deceased person’s will if they had one in place
- Creating an estate inventory of the deceased person’s assets and liabilities
- Notifying creditors that the estate owner has passed away
- Selling assets as needed to pay any outstanding debts
- Locating heirs if the person passed away without a will
- Distributing remaining assets to the deceased person’s heirs, either those named in a will or heirs at law
- Closing the estate
What Does It Mean to Close Probate?
Closing an estate means that the executor has carried out all of their duties and that there’s nothing left to do to manage the estate other than distributing assets. There are some things the executor needs to do to close probate, starting with providing a final accounting to the deceased person’s beneficiaries or heirs. This accounting should show:
- Assets of the estate and their corresponding values
- Debts owed by the decedent that were paid out of estate assets
- Expenses paid on behalf of the estate, including taxes
The beneficiaries or heirs are allowed to review the accounting and either approve it or dispute it. Assuming the beneficiaries sign off on this accounting record, then assets can be distributed. After this is done and all debts and/or taxes have been paid, the executor can file a petition to close probate with the probate court. The court can then review the petition and move to close the estate.
What Happens After Probate Is Closed?
After probate is closed, beneficiaries and creditors still have a window of time in which they can file complaints against the executor or the estate itself. The federal Uniform Probate Code allows up to one year for complaints to be filed, though individual states may allow for a longer time frame.
A creditor or beneficiary could choose to file a complaint if they believe the estate was mishandled by the executor. A beneficiary could claim that the executor violated their fiduciary duty, or a creditor may raise objections if they believe they didn’t receive adequate notice of their right to make a claim against estate assets for unpaid debts.
If there are no complaints filed in connection with the estate, the executor’s authority will expire and the estate will be closed. It’s important to note that a will can still be contested even after probate is closed.
What If Additional Assets Are Found After Probate Closes?
Even with a thorough inventory and accounting, it’s possible that an estate executor could overlook assets. When additional assets are uncovered after probate has closed, the executor is responsible for notifying the court that initially handled the probate process. The court may decide to allow the executor to distribute these new assets without reopening the estate.
Some states, however, may require the opening of a new probate claim. If that happens, the same person may act as executor or a new one may be appointed. The executor would have to complete the same steps required for probate to distribute any newly-discovered assets.
Creditors who were able to successfully pursue a claim during the first round of probate may be able to make a new claim against these assets. The division of any remaining assets may depend on whether the deceased person had a will in place and whether that will made any mention of how overlooked assets should be distributed to their heirs.
Filing a Complaint After Probate Is Closed
If you’re the beneficiary or heir of someone who has passed away and you believe that the probate process was closed improperly, you may have grounds to file a complaint. You may have grounds for a complaint if you believe or suspect that the executor:
- Intentionally provided inaccurate information about estate assets
- Misused or mishandled estate assets, resulting in an unfair distribution
- Stole assets or money from the estate
- Otherwise failed to carry out their fiduciary duties
You’d need to file your complaint with the probate court. An estate planning attorney or financial advisor may be able to advise you what your legal rights are and how to file a separate complaint to contest the terms of the will, if necessary.
Probate can be a lengthy and time-consuming process, both for the executor and the estate’s beneficiaries. Understanding what happens after probate is closed can make your job easier if someone names you as their executor. It can also help you to be better informed about your legal rights if you stand to inherit assets from someone else.
Estate Planning Tips
- Consider talking to your financial advisor about how to develop a comprehensive estate plan and what to do if you inherit assets from someone else. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Establishing a trust might be appealing if you’d like to leave assets to your loved ones but save them the time and trouble of having to go through probate. Different types of trusts can also serve other purposes, such as providing for the care of a special needs dependent or providing protection against creditor claims.
Photo credit: ©iStock.com/stocknshares, ©iStock.com/kazuma seki, ©iStock.com/Ilya Burdun