What is Probate?
The probate process begins when the family or friends of the deceased person contacts an attorney to determine if probate is required. The attorney will ascertain what the deceased owned and how it was titled. If the deceased person did not own any real estate in his name alone, and the other assets in his name alone have a value under $10,000 after all of the outstanding debts are subtracted, the assets may be gathered and distributed by using an affidavit.
The attorney will then determine who is entitled to the deceased's property. If there is a will, the will provides all the needed information. If there is not a will, the law of the State of Nebraska will determine who receives the assets, in what proportions the assets are divided and who will serve as personal representative. The personal representative (PR) is the person who selects the attorney and who is in charge of gathering and distributing the assets.
I should note that the advertising about trusts has led many to be fearful of making out a will even if a probate avoidance tool is not used. A will is needed even if you have a living trust, have all of your property in joint ownership, or have complete confidence that Nebraska law will distribute the property to your children.
The will protects assets you inadvertently leave out of the trust or have in an account where the joint owner, who is expected to die first, does not. In a probate proceeding, the will reduces the costs by deciding some issues without need for a court hearing. A few examples would be selecting a PR, waiving the PR's bond, and authorizing sale of real property without court order.
Nebraska has two probate formats: formal and informal. Unless there are indications that a problem exists, the informal proceeding is usually used. The time period between opening and closing the probate is six months. If the estate is over $ _____, it usually takes one year because of the federal taxation. Assets are frequently distributed to the heirs prior to the sixth month.
The basic steps of probate include appointing a PR; giving notice to persons named in the will, other potential heirs and creditors (note: the publication of notice required by probate significantly reduces the period of time a creditor can file a claim); payment of debts; filing of insurance claims; gathering and inventorying of assets; and the distribution of assets after prior notice is given to persons entitled to receive property.
Another step is the inheritance tax proceeding. This procedure is required even if the assets are in a living trust or in joint ownership (unless the person receiving the asset is a spouse). The tax calculations are mailed to the heirs in advance. The county attorney approves the calculations on behalf of the county. Tax rates range from 1 percent to 18 percent.
The cost of probate includes the attorney's fee, the PR's fee and the court costs. The court costs are frequently under $100. The PR is usually a child who waives a fee because the other siblings have helped with the work. Attorneys charge either by the hour or by a percentage calculation (3-5 percent). A well-drafted will and a well chosen PR will significantly reduce attorney time, although the least expensive attorney may not be the best choice. You might consider checking with several.
The PR is not obligated to use the attorney who drafted the will. The attorney will be able to provide an outline of the costs for probate before he or she begins.
If you are in need of legal assistance, please call the LIFE Office (Lincoln Information For the Elderly). This office can help people in Butler, Fillmore, Lancaster, Polk, Saline, Saunders, Seward, and York Counties.
In Lancaster County 441-7070
In Other Counties (Toll Free) 1-800-247-0938
