We’ve bought a lot of houses over the years and many of the questions we receive from sellers center around probate. What is it? How can we avoid it? Can I sell a house or other property in the middle of it? And more.
Today we want to take a look at just what is probate.
The Kansas Bar Association defines it as “Probate is a court procedure where the validity of a will is proved or disproved. It involves all estate administration proceedings. When a person dies, all property, other than property passing directly to others (such as property held in joint tenancy, life insurance proceeds and retirement plans payable to a named beneficiary), may be subject to a probate proceeding. An estate is generally probated in the county where the deceased owned property. If property is located in another state, additional proceedings are sometimes necessary in that state. There is no natural right to inherit property. This right exists solely as granted by statute. Kansas law provides for the probating of estates to protect all interested parties.”
Basically the legal system uses this process to make sure the will is valid and to appoint someone to oversee the will and clearing up the estate. The person appointed will collect all assets, protect them, pay off any creditors, and then distribute the assets. The probate court is there to protect and assist the appointee to make sure everything goes smoothly and to help transfer legal ownership where necessary.
What Happens in the Probate Process?
The will usually names a person that the deceased would like to oversee the assets and distribution. If there is no one appointed or if a will does not exist, the court will appoint someone to administer. Then under the guidance and direction of an attorney, the estate will be settled.
- Appointee notifies all heirs and creditors of the probate .
- Appointee will inventory and preserve all assets of the deceased: money, cars, houses, general possessions.
- Appointee will continue to collect any income due such as interest, dividends, rents if there is rental property, or mortgage payments if there are any notes due. They can also demand payment should schedule payments to deceased not be made.
- If the deceased owned a business, the appointee will manage that business.
- Appointee will then get all the information needed on heirs, names, ages, addresses, etc.
- Appointee will complete any pending lawsuits that the deceased may have been party to our that maybe brought against the estate.
- Appointee will prepare tax returns and pay any and all taxes.
- Appointee will pay all creditors of the deceased and if necessary liquidate assets, like selling houses and mortgage notes, to raise funds to pay creditors.
- Appointee will legally distributed real property and other assets to the heirs.
What Does the Court do in the Probate Process?
The courts job is administer the estate, oversee the appointed executor or administrator. Make sure the law is followed and when sale of assets are over certain amounts or debts are over certain limits, the court will make final determination before sales and payments. As every probate case is different in Kansas City, the time frame varies. Generally in Kansas anyone have knowledge about a will has six months after the date of death to bring that information forward. Creditors have four months to file claims against the estate. And final tax returns and payments are due no later than nine months after the date of death.
What Property is Exempt from Probate?
Not all items owned by the deceased are subject to probate.
- Life Insurance will pass directly to the designated beneficiary unless that beneficiary is the estate or the executor.
- Property owned in joint tenancy with right of survivor ship will pass automatically to the surviving joint tenant, although they may have to pay some taxes.
- Bank Accounts with a “Pay on Death” provision will pass directly to the named party.
- Transfer on Death provisions can also be set up for securities, titled vehicles and real estate.
What about Estate Taxes?
First there is the Federal Estate Tax, that is based on the value of the assets in the taxable estate. The second type you may see is a State Inheritance Tax. Please consult an attorney and / or a tax professional on these matters.
What about Small Estates?
According to the Kansas Bar:
The laws of Kansas provide that when the deceased leaves a spouse or minor children, a simplified proceeding may be used when:
- the estate is made up entirely of personal property
- the estate does not exceed the amount of exempt property
- the estate does not exceed the maximum family allowance of $25,000. It’s called a “Refusal to Grant Letters of Administration.” This proceeding can also be used by a creditor where the deceased person’s estate consists of real and personal property that does not exceed $25,000 and when there is no claim for family allowance by a surviving spouse or minor children.
The availability of the “Refusal to Grant Letters of Administration” process can be determined by the lawyer and the executor or administrator at the time of the initial conference. Probate can be avoided if the estate contains no real property and the value of the estate is less than the total value of all demands against the estate. Any person possessing a will may then file it with an affidavit. If assets are discovered later, the will can then be probated and the assets distributed according to the will. If the deceased had no will and left only real estate to the surviving spouse and other family members, a “Determination of Descent” proceeding may be instituted at any time six months after death. This proceeding takes about 30 days to complete and is often used when reasons to probate administration do not exist.
Even if a “Refusal to Grant Letters of Administration” or a “Determination of Descent” proceeding is used, there may be Kansas Inheritance Tax and federal estate tax filing requirements.
What Should the Heirs Do?
Other than making efforts to protect property, the KS Bar suggests not disturbing anything and to first consult an attorney in the matter. Your attorney can help you determine if probate is necessary and if it is not. Then help direct the family in the process.
- Probate Law Resource Guide from the Missouri Bar
- What is Probate from the Kansas Bar Association
- Avoiding Probate in Kansas
- Avoiding Probate in Missouri
- Top Probate Attorneys in Kansas City Our List