Probate and Non-Probate Assets
When a person dies without a will, the probate court assesses the fair distribution of the decedent's estate based on state law. The probate court defines the property of the estate by dividing it into probate assets and non-probate assets. Non-probate assets are distributed through contractual arrangements made prior to the decedent's death and these assets are outside the probate proceeding. For example, a life insurance policy with designated beneficiaries is classified as a non-probate asset. The decedent named the beneficiaries prior to his death as part of the insurance policy contract. The court oversees the distribution of all probate assets, including real property, personal property and bank accounts.
Appointment of an Estate Administrator
The probate court assesses the fitness of the surviving spouse, another family member or other descendants to serve as the estate administrator. In the absence of any conflict of interest or significant bias, the court often gives priority to administer the estate to the surviving spouse or other close family member. The estate administrator must be able to complete probate documents, compile and inventory probate assets, ascertain the fair market value of the assets and obtain the necessary professional appraisals of the estate. The court must take into account any objection made by descendants or heirs of the estate against the potential estate administrator and may schedule a separate hearing to consider court motions against the appointed administrator.
Assessing the Value of the Estate
Once the court appoints an estate administrator, it requires the administrator to complete a proper accounting and valuation of all probate property assets. The estate administrator files the probate property inventory form with the probate court, and the court uses the inventory list to assess the value of the estate. The court orders a division of the assets according to the state laws on intestate succession, which differ somewhat from state to state. Under most state intestacy laws, property generally goes to the decedent's surviving spouse or domestic partner, children, parents, siblings, nephews and nieces and down the line of direct descendants. If no direct descendants exist, the estate goes to more distant relatives or the state.
Probate Court Considerations
The court assesses the need for temporary administration of the estate, permanent administration of the estate or no administration of the estate. Temporary administration may be required to access a safe deposit box, recover a will or arrive at a general consensus among heirs. Permanent administration would last until the estate was distributed in its entirety. In some cases, no probate administration of an estate is required. Although probate laws vary from state to state, many states allow small estates to be settled without prolonged probate proceedings. Some states consider a small estate to be under $5,000, others include estates valued up to $30,000. A court may expedite probate matters if the heirs unanimously agree on a distribution plan and prove that the estate has no outstanding debt.