What Is Probate? How It Works, How to Avoid

Probate is a legal process for validating a person’s will and distributing the assets and property of someone who died. A probate court formally appoints an executor to distribute the deceased’s property to beneficiaries and pay the estate’s debts or taxes ^[0]

Although probate is often straightforward, many people want to avoid it. The reasons can vary, but there are some common complaints about the process.

» MORE: See who has to pay federal or state estate taxes

Although laws and procedures tend to vary from state to state, the probate process largely depends on whether the deceased person had a will.

» MORE: How long do you have to file for probate after a person dies?

Probate process with a will

Here’s how the probate process often starts if the deceased person had a will.

1. A representative of the estate files the will and a certified copy of the death certificate with the probate court, which validates the will to make sure it is authentic. This step is easiest when the will includes a self-proving affidavit — a sworn statement signed by the author and witnesses that legally proves its validity. In the absence of a self-proving affidavit, a new sworn statement signed by a witness or live testimony from a witness can help authenticate the will.

2. The court appoints an executor or personal representative of the estate. Generally, the deceased person named an executor or personal representative in their will, and the probate court judge appoints that person. If the will does not include those instructions, the probate court will appoint someone (usually next of kin or a direct family member) to be the executor or personal representative. 

3. The court gives the executor or personal representative letters of testamentary, which are (typically in conjunction with a death certificate) proof for banks and other financial institutions that the executor has permission to handle the deceased’s assets.

» MORE: Learn how to write a will

Probate process without a will

If there is no will, the deceased person passed away “intestate.”

1. The court must hold an administrative proceeding to determine how the estate will be divided. The court will name an administrator for the estate; this person may or may not be a family member.

2. The estate administrator follows the probate judge's instructions on how to distribute the decedent's property and assets.

» Want to learn more? See NerdWallet’s estate planning basics

Probate steps with or without a will

Once these preliminary steps are completed, the probate process typically moves forward with the following steps:

1. Post a probate bond. In many cases, the court will require the executor or personal representative of the estate to post a probate bond (also called a fiduciary bond). The bond is a guarantee that the executor or representative will follow state laws and the terms of the will. If the executor or representative fails to do so, family members of the deceased can file a claim against the bond. Probate bonds help protect the executor of the estate in the event that something goes wrong.

2. Notify beneficiaries and creditors. A beneficiary is the person or persons who receive some or all of a deceased person’s assets. The executor or representative must identify and inform beneficiaries and creditors about the death. In general, creditors have a limited amount of time to respond and submit claims against the estate. If a creditor misses the deadline, typically it can no longer file a claim.

3. Appraise property and assets. The executor or representative must determine the value of all probate assets in the estate. Typically, the executor will get some appraisals done to determine property values, but this can also involve drafting an inventory of all personal property that will go through probate, which can be time-consuming.

4. Pay outstanding debts. In most cases, the first expenses the estate pays are funeral expenses and taxes. After that, the executor is in charge of paying outstanding debts to creditors who filed a claim within the appropriate time period. The executor is also responsible for disputing claims against the estate if necessary.

5. Make distributions to beneficiaries. The executor or representative handles distributions of any remaining assets to beneficiaries in accordance with the will. Some beneficiaries may have to pay a state inheritance tax.

6. Close the estate. The executor or personal representative files a final accounting with the probate court. This report details all assets, debts paid and distributions to beneficiaries. If the court finds the report in good standing, it releases the executor or personal representative from their duties, and the estate is officially closed.

» MORE: How inherited IRAs work

• Have a small estate. Most states set an exemption level for probate, offering at least an expedited process for what is deemed a small estate. In some cases, "small" actually can be quite large. Check your state's probate estate limits, and consider giving assets to family and friends before you die. This tactic might also trim or even eliminate future federal and state estate taxes.

• Establish a trust. Property held in a trust is not part of your estate upon your death. A trustee, not you, controls the trust property and is obligated to distribute it under the terms of the trust agreement.

• Make accounts payable on death. Bank and other accounts that are payable on death go directly to your designated beneficiary without going through probate, as do life insurance policies with named beneficiaries. Some states also allow such transfers of real estate, called transfer on death deeds.

• Own property jointly. Making your spouse or someone else a joint owner facilitates the transfer of the asset without the need for probate. Some ways to hold such assets include joint tenancy with right of survivorship, tenancy by the entirety and community property with right of survivorship.

» MORE: How to use life insurance to leave an inheritance