The only way you can beat the lawyers is to die with nothing.
— Will Rogers
Probate has several main objectives:
Common law allows the probate of an estate at any time, but state statute may limit the time. The UPC, for instance, provides that probate cannot be initiated more than 3 years after death.
To pass property through a will or by intestacy means that it must pass through probate, which is the jurisdiction of the probate court.
The process of probate begins when the death certificate is presented to the probate court (sometimes called chancery court, orphan's court, surrogate's court, or the probate division of the district court) that has primary jurisdiction (aka domiciliary jurisdiction), which is the jurisdiction of the decedent's last address.
The decedent's estate is administered by a personal representative. If the will names the personal representative, then he or she is called the executor of the will. If the person dies intestate or the will does not appoint an executor or the named executor declines the appointment, then the probate court will appoint an administrator who will execute the decedent's estate.
The personal representative is most often a close relative or friend of the decedent, and must post a bond if the will does not waive it, although most usually do. The court then issues letters testamentary to an executor named in the will or letters of administration to an administrator selected by the court, which legally allows the personal representative to act on behalf of the estate.
The probate process can involve many steps, depending on the size of the estate and the variety and types of property within it. All of the assets of the estate must be determined and its value, if not easily determined, must be appraised. The estate will have to file the decedent's last tax returns and pay any tax liability. And because the estate is a separate taxable entity, the personal representative must also file a tax return for the estate and pay for any liability out of the estate's assets.
The personal representative must also notify all creditors of the decedent so that they can file a claim with the estate for payment. Creditors must file a claim within the deadline set by law or they will be forever barred from attempting to collect it.
If the estate has real estate, then it may be necessary to continue paying mortgages, or real estate may have to be sold or leased. If the property has to be sold, then the personal representative may need to get a court order to allow the sale of the real estate and to give notice of all offers received, and may even require court approval for the final sale to the highest bidder.
Probating an estate that has real property located in another state requires ancillary administration, by petitioning the court that has jurisdiction over the property. Sometimes the ancillary administration must be conducted by a state resident, usually an attorney, who will then be entitled to an executor's or attorney's fee. Ancillary administration is necessary to ensure that the jurisdiction's laws are followed in transferring the property and to give creditors who have a lien on the property a notice of the transfer so that they can file their claim with the estate.
Fees, which usually require court approval, must be paid to attorneys, appraisers, and any other professional that was necessary to probate the estate, and the personal representative is paid a commission, although it may be waived if the personal representative is a close relative.
After all liabilities of both the estate and the decedent are paid, the remaining assets are distributed to the beneficiaries.
Probate can be formal or informal. Formal probate (aka notice probate, solemn form probate) requires that the personal representative get permission from the court to do everything, which includes property appraisals, debt payments, payment of fees, and the actual distribution of property. This, of course, greatly increases both the time necessary to probate the estate and the cost.
The purported purpose of formal probate is to prevent fraud, but, for years, probate courts and attorneys have used probate to extract fees out of the estate, which is why one of the main objectives of estate planning is to avoid probate.
Informal probate (aka ex parte probate, common form probate) allows the personal representative to administer the estate without going to court. He has the same powers that a trustee has over the trust.
Obviously, informal probate is much faster and cheaper than formal probate, but informal probate depends on trust, so it is only allowed if the personal representative is a close relative of the decedent and most of the beneficiaries are also relatives. Common law has allowed any party in interest to petition the court for a formal probate at any time, which greatly increased the cost and time for probate, but states have limited probate challenges to a fixed time.
The probate process ends when the personal representative gives a final accounting to the probate court. After everything has been done—creditors and taxes paid, property distributed to the beneficiaries, and so on—the personal representative must petition the court for a discharge to be relieved of any further fiduciary responsibility as the personal representative of the estate.