8 common probate issues
Probate is a court process designed to appoint a personal representative and validate a will. Most assets are reviewed through probate administration following a person’s death, to determine inheritors and otherwise settle a person’s affairs. But even in cases where there is no will, court may be necessary.
No one wants to go through probate court, which is often a long and complex process. But when there are probate issues, it can make things much worse.
It can take several months to complete all steps of the process. Unfortunately, in some cases there are additional probate issues that can slow down the process even more, incur extra cost and potentially undercut the deceased’s wishes. These include:
1. No valid will
If the deceased did not leave a valid will, the estate is known as “intestate,” and several parts of the normal process change. One of the biggest changes is that the law's default rules take effect, starting with choosing the personal representative. This is typically a spouse or other family member, but each situation is different.
One common issue is the distribution of real estate. A person’s home is often their largest asset, and if no direction was left on what should happen with the house, it can slow down the process – especially if all beneficiaries do not agree. Sell the property and split the proceeds? Keep it and let one beneficiary live there? Rent it out? In these cases, the probate court will need to get involved, dragging out the process.
2. Contested will
Even if there is a will, a beneficiary or potential beneficiary (another family member or loved one) can claim that the will is not valid. The person bringing the challenge to the will must have “standing,” which means that if the deceased had died without a will, this person would have been eligible to inherit.
The purpose of a will is to ensure that the deceased’s wishes are being followed, so in cases where the will is contested, it must be proven that the will was not the true intent of the deceased. Some common grounds for invalidating a will include:
The existence of a more recent will
Lack of mental capacity by the deceased at the time the will was developed
Undue influence by another to get the deceased to sign the will
Fraud, such as the deceased not knowing they were signing the will
The will was not witnessed or signed correctly
The will was forged
Litigating a contested will can add significant time and cost onto the process and often requires the assistance of a probate attorney.
3. Mistakes with probate filings
Given the complexities of the process, many families turn to a probate attorney for assistance. However, some choose to go it alone to save cost. This is an option, but the challenge is that the initial paperwork that needs to be filed can be confusing. And if mistakes are made in the documents submitted to the court, they may be rejected. This may require hiring a probate attorney to fix it.
4. Personal representative who is unwilling or unable to perform duties
When someone develops a will, they typically name some to execute their last wishes during probate administration. However, if the person named as the personal representative chooses not to accept this role – or is unable to perform the duties due to being deceased or incapacitated – the court will instead need to appoint a personal representative. Given that life situations change over time, this is one reason why it’s important to update wills and other estate plans periodically.
5. Personal representative fails to perform duties
On a similar note, if a personal representative does accept the role but doesn’t complete all of the tasks assigned to them, the court may choose to remove this person. This is a much more serious probate issue than having someone decline the role upfront, given that it can introduce a roadblock in the middle of the process.
6. Missing assets
During probate administration, no stone is left unturned to identify all potential assets from the deceased. This may include cash from one or more bank accounts, vehicles, real estate or other assets. In a good estate plan, these have all been documented, which can help streamline this part of the process.
If assets are missing, it’s either because the estate plan was not comprehensive or because the deceased’s situation has changed and there are new assets that have not been recorded. In this case, the personal representative will need to investigate several sources to try to find these. Depending on the specific situation, it may also help to have the assistance of a probate attorney, who can use other specialized legal tools to help hunt down the missing assets.
7. Assets in multiple states
Documenting assets is a detailed process on its own. However, when the deceased owned assets in multiple states – for example, owning a residence in Michigan but a vacation home in another state – it may require separate probate proceedings in each state.
8. Large debts against the estate
Following the documenting of all assets and the collection of any debts owed to the deceased, all debts must be paid. This may include debts that are easier to find, such as credit card balances on the deceased’s account statements. However, in some cases, there may be other large debts that are unknown. For example, if the deceased was a Medicaid recipient, the State of Michigan may try to be repaid for some of these benefits through its estate recovery program.
Avoiding probate
Not all assets go through probate. For example, small estates (under $27,000 in 2023), jointly owned property, and retirement accounts and life insurance proceeds often bypass probate. In addition, there are other strategies – such as placing some assets into a living trust or transferring your home to an heir through a ladybird deed – that can help to avoid court.
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Buzz Suuppi
Buzz started The Plan Firm for his family, which is everything to him. Every member of his team is committed to providing effective estate planning and related solutions for families in St. Clair County, Michigan.