Wills and Probate

Will my estate go through probate?

Contrary to what people may like to think, when someone dies owning property, it does not automatically pass on to their heirs. The first person to show up at the house with a pick up truck isn’t allowed to just take what they want. Your father’s classic car or his tools do not become yours simply because you remember him telling you that someday they would be yours.

Your grandma’s house doesn’t suddenly become yours just because her Will says she wants you to have it when she dies. Spoken words are fleeting and, unlike what is written down, fade with memories. A Will is just a set of instructions about what the writer wants down. It is not a transfer document. Once they are dead, something else has to be done before the property is yours. The estate has to go through a process before it is yours. The nature and extent of that process depends upon how much advance planning was done and how title was held before death.

Note that Wyoming law requires that the deceased’s Will be filed with the district court within ten (10) days of death or coming into possession of the Will, even if there will be no estate administration. Failure to deliver the Will to the court can make the Will custodian (the person who has it in their possession) personally liable for any loss that others suffer as a result of not having the Will available to open probate.

When is probate required?

When a person dies, some assets pass to certain people as a matter of law. These are called “non probate” assets. For example, if a husband and wife have a joint bank account and the husband dies, the wife gets the money in the account automatically, usually by presenting a death certificate to the bank. Actually, by virtue of it being a joint account, they shared the money with each other. It was hers before he died. All the bank does is remove his name from the account. The same is true in the case of a house whose title is held in joint tenancy or as “husband and wife.” An affidavit is recorded at the courthouse and the deceased’s name is removed from the title. No actual transfer occurs at that time.

Another major category of non probate assets are life insurance and retirement accounts that specifically name someone as the beneficiary. “Payable on death” accounts at the bank and “transfer on death” stock and mutual fund accounts at the brokerage house are also non probate assets. Another example are testamentary or transfer on death deeds, commonly called Lady Bird deeds. In each case the assets will be distributed or transferred to the designated parties upon presentation of a valid death certificate and completion of some paperwork.

All other assets are called “probate assets.” Probate assets do not pass automatically and must undergo the probate process to transfer title.

What are “probate assets?”

Household goods and furnishings, personal effects, bank accounts, stocks, bonds, automobiles, real estate generally anything that is held solely in the deceased’s name and does not have a survivorship title, listed beneficiaries, or payable on death designations are called “probate assets” and must go through some sort of probate process to pass ownership on to the heirs.

What must be done to pass probate assets on to heirs?

The rules governing probate vary from state to state. Options that are available in Uniform Probate Code states (like Colorado) may not work in Wyoming. Likewise, Wyoming statutory protections for the heirs, and requirements that creditors must satisfy in order to be paid, may not exist in other states. Thus, knowing the location and type of assets becomes important. The initial step usually consists of a rough identification of the deceased=s assets. The detailed inventory and valuation required in a formal court supervised probate is not necessary at the beginning. We just need to know enough to determine which route to pursue in moving forward.

After all the “non probate assets” are identified, the remaining “probate assets” are generally administered in one of three ways:

1. Distribution by Affidavit:

In cases where the value of all probate assets is less than $200,000, after the expiration of a statutory waiting period to allow for a formal probate to be opened, those probate assets can often be transferred to the heirs by filing an affidavit in proper form with the county clerk. The person holding the deceased=s assets must then give them to the heirs and title to assets like cars, checking and savings accounts, stocks, bonds, etc., must be changed to reflect the distribution. Real estate is handled through a different process described below. If the lucky heirs named in the deceased=s Will are different than those defined under statute, the Will must be accepted and proven by the court.

With the help of an attorney and a little advance planning, it may be possible to avoid court involvement by structuring your estate so that there are less than $200,000 in probate assets. Unfortunately, distributions by affidavit generally do not dispose of any claims that creditors might have against the deceased or the estate.

2. Summary Distribution:

If a person dies with probate assets under $200,000 that include real estate, a court order is required to transfer title. This is done by filing an application for summary distribution with the court and publicizing notice in the newspaper. After people have the opportunity to object, the court signs an order distributing the property to the heirs, including the real estate. The order acts like a deed when it is filed with the county clerk. Summary estate administration can take as little as two months and usually requires the services of an attorney to make sure it is done correctly. As is the case with distribution by affidavit, creditors’ claims remain intact in a summary distribution and may need to be paid by the heirs.

As mentioned above, if there is a Will that names someone to inherit other than the heirs defined under Wyoming Statute, (for example, if one or more of the children are disinherited) it may still be necessary for the Will to go through an additional probate process of publication in the newspaper to prove that it sets out the deceased’s final wishes and should control.

3. Court Supervised Probate:

A formal court supervised administration is required if the total value of all probate assets exceed $200,000. Formal probates are governed by strict statutory rules designed to make sure the personal representative faithfully does their job and everyone involved is treated fairly. In this process the court appoints a personal representative to administer the estate, notice is published in the newspaper, and anyone owed money by the estate has three months to file a claim in proper form.

Failure to file a proper claim during the allotted time means that the creditor will not get paid. If it becomes necessary to pay expenses and bills, or to divide the estate, with the court’s permission the personal representative can sell off assets. After all just claims and debts are paid, the personal representative must file a report and accounting with the court and, if approved, can distribute the estate. Most estate requiring formal probate can be administered in nine months to a year, although it can take longer if property doesn’t sell quickly, the personal representative delays or drags their feet, or the heirs interfere with the orderly progress of the probate.

Even when the estate is under $200,000, it often makes good sense to do a formal supervised probate to take advantage of having a personal representative appointed by the court to gather and manage assets or to cut off creditor claims.

Who’s in charge of administering an estate?

The person appointed by the court to administer the estate is call the “personal representative.” This is because he/she represents the person of the decedent. A Will generally nominates the personal representative. Even so, that person is not recognized as the personal representative and has no authority to act until appointed by the court. In fact, it is against the law to act as a personal representative before the court issues its order of appointment. Before the court issues its order, by statute the personal representative must post a bond, unless it is waived under the Will or by all the heirs. If a person doesn’t have a Will, an heir or other interested party can petition the court to be appointed as personal representative.

• The personal representative is a fiduciary and as such has certain duties including:
• Giving notice to creditors and heirs;
• Acting impartially and treating the heirs fairly;
• Locating and inventorying all the probate assets and obtaining independent third party valuations;
  Preserving and maintaining the estate and preventing any harm or loss including by waste, risk, or looting;
• Selling property at fair market value and paying the just debts;
• Maintaining good records and reporting to the court; and
• Distributing the balance of the estate to those entitled to receive it, subject to court approval.

In performing these duties, the personal representative is subject to strict statutory standards and deadlines. Failure to comply can result in the personal representative being held liable for any loss or damage.

A Word About Fees

In probate an attorney’s help will be needed. The amount and nature of the help will depend on the complexity of the estate. Costs and fees depend upon the size of the estate and are generally fixed by statute. The job of the attorney is to keep the personal representative on track, prepare and file court documents, and prepare transfer documents.

For estates under $200,000 the attorney will normally bill for his services at an hourly rate. The allowable rate for larger estates is fixed by statute. Sometimes people will try to handle the estate on their own, without the assistance of an attorney. They may even do nothing, thinking that the Will is all that is needed to transfer the estate. This usually ends up costing them more in both time and money than if they hired an experienced attorney in the first place.

Attorney KELLY DAVIS has been a member of the National Academy of Elder Law Attorneys since 1997. In 2018-19 Attorney DAVIS served as the Chairman of the Wyoming State Bar’s Estate Planning, Elder Law, Trusts & Probate Section. He and his staff are frequent presenters at continuing legal education seminars on topics of and relating to estate planning, probate, estate administration, and elder law.

Why You Should Avoid Making DIY Wills

As a trusted wills lawyer understands, there may be a huge temptation when it comes to creating your own will. In fact, there are many online companies that will let you create a will for an inexpensive amount and it typically only takes a few hours. While this can seem like a win-win, it is important that you understand what the drawbacks are of making your own will and how working with a lawyer could benefit you. If you are considering creating your own will or if you have already created a will but need to make amendments, give the team at Davis, Johnson & Kallal a call. We want to help give you peace of mind when it comes to your estate plan. 

Isn’t a DIY will still better than nothing? 

Technically, yes. You may want to just throw a will together quickly, pat yourself on your back, and move on. After all, one that is thrown together is still better than not having a will in the first place, right? That said, you are opening yourself up to errors and complications in the future and it may not help move anything through probate quicker if it wasn’t done correctly. When there are errors or problems with your will, you may not be the one who ends up dealing with the problems but it will likely be your loved ones. 

You May End Up With Spending More Money Regardless 

Many people believe that when you avoid using a lawyer for the process of creating a will then you will avoid spending a lot of money. While this may be true for some, it is important to understand that if there is any complexity to your will or you add in things that a DIY creator doesn’t like, it will try to get you to pay for legal services. This can complicate matters and you may find that you end up working with a lawyer anyway. Instead, when you work with a wills lawyer from the beginning, they can help you gather all of your assets and learn about what you hope to accomplish in making a will so that you get everything you need out of the process. 

You May Not Coordinate Everything Properly 

This can cause family and friends to get headaches down the road. If you are naming people as beneficiaries in your will and those names do not match with who you have named for your retirement accounts or other account information, then the person you most recently named may not end up getting what you had hoped. For example, if you named your spouse on your retirement account but changed your mind when creating a DIY will and named your child instead, you may be disappointed to find out that the person named on the account will be the one who gets your retirement money. 

Wills and estate planning can be complicated. This is an area that can be so important to your legacy and determining where things go that you have worked hard for in life. Instead of leaving it up to chance or leaving it up to the possibility of errors messing it up, work with a lawyer you can trust. Call Davis, Johnson & Kallal to speak with our wills lawyer now.