Mastering Probate


Photo Credit: Sursly

“To hell with circumstances; I create opportunities.”

– Bruce Lee

I remember when I got an interview to work with an Investment Bank in their “equities” group.  I had no idea what “equities” meant.

I walked into my friend’s Brian’s room at college and said “Hey man, I have an interview next week with an equity trading group.  What is equities?”

He stared at me.

“You’re definitely not getting the job if you don’t know that”, he said.

But he was wrong.  I researched, I spoke with more people for background, I interviewed experts in the field.  I was ready.  And you know what?  I did get the job and it rocketed me into a ten year highly successful career in finance.

Sometimes we all need to step into a role we don’t know anything about. 

Take fifteen seconds now and write down two jobs you have taken that you knew nothing about at the outset.  I bet with focus, help, a little bit of time and research you got better.

That’s what we’re going to do with Probate.  You’ll be ready.


The Power Of Probate

As part of the journey of completing the affairs of someone who has passed, many families participate in a process called probate.  This process is primarily a legal one and focuses on distributing assets and closing out final debts of the deceased.

In a previous post I spoke about the basic elements and timing of probate.  I also reviewed the role of a “personal representative”, usually a family member, who is charged with ushering the loved one’s estate through the different stages of probate.

Now I want to come to the direct aid of that “personal representative”.  I want to give her the exact tools she needs.

If you are new to probate or don’t feel you have the skills to understand the legal jargon or work with a lawyer this is the post for you.

We’ll strip away all the legal terms and confusing language.  We will tear down the process to core elements and review the principles and practices that will elevate you to an expert.

By the end you will know what’s coming and how to prepare for it.  No one will surprise you with a step you haven’t heard of or don’t know how to address.

Let’s begin the master class in probate.


Top 3 Probate Myths

  1. Probate Is For Lawyers Only – Probate is a word most people either don’t know what it means or think it’s just for lawyers. It’s not.  A family member or friend plays a critical role.  They are responsible for working with a lawyer and the court to count up and distribute the possessions (physical and financial) of the deceased.  If someone dies, the law requires that someone steps into this role.  Check out my last article on probate for background.
  1. There’s No Way I Can Help – Like math when people hear about the law their eyes glaze over and they search for a corner to hide in. However probate can get you and your family thousands of dollars.  Does that sound like something you would work a bit towards?  Probate can take some time but it’s not overly complex.  It can 100% be learned within a few hours.  It could be some of the most profitable hours of your life.
  1. Probate Will Take Up Too Much Of My Time – Think of probate like a series of sprints and not a marathon. They will be high points of activities but no, the process is not a second job.  You have partners in this process.  A lawyer will guide you.  The courts will tell you the next step at each major stoppage point.  We’ll talk about how to budget your time effectively and where to focus your attention.


How To Make Thousands During The Probate Process

Probate can feel like a drawn out process but it can also have huge benefits for you and your loved ones.  Maybe your mother left a home or some retirement assets.  Or your father had a vacation property that the will divided among three children.

There are tricks that you can use to decrease the costs of the probate process and increase the final distribution of cash and assets.


Rule #1 – Collect Your Loved One’s Major Documents Before Seeing A Lawyer – Lawyers cost an enormous amount of money.  Any lawyer worth your time will cost $150 / hr +.  When you go to your lawyer this is the very first thing he will ask you to do.

You will save 10 – 20 hours of billed time to your lawyer by doing this yourself.   This one step will save you $1,500 – $3,000.

Here’s exactly what you need to gather:


Probate Documents

Type Components
Health Care Certificate of death signed by a doctorBirth certificate Organ donor cardMedicare / other insurance card
General Information Full namePlace of birthLast address OccupationWhether the deceased was receiving state or federal benefits
Will Sealed copies of the will and grant of representation
Savings/Investments Bank statements (e.g., checking & savings)Investment statements (e.g., retirement accounts) Pension/Social Security Info
Insurance Life insurance documentsGeneral insurance documents (e.g., home, car)
Debts owed Mortgage statementsCredit card statementsUtility statementsRental agreementsOther outstanding bills Lease agreements (e.g., car, furniture)Education loan statementsAny other statements
Property Property Keys Property deeds or leases
Other possessions Existing valuations of property such as jewelry, art work and similar items of worth Any existing inventories of property/possessionsSafety box deposit information
Employment Recent tax returnsLatest pay slip
Business Company registration documents, accounts, tax returns if they had a business


Rule #2 – Set Up An Arrangement To Pay Yourself – If you have been named the person in your family who will catalog assets and debts and represent your loved one through the probate process (often called the “personal representative”) you can ask the estate to pay you a fee for your work.  The probate courts decide this and often the pay is between 1% – 3% of the total assets of the estate.

Too often caregivers and those who assist the family get financially forgotten.  They work hard and put aside their own priorities to care for a loved one.  When possible they should be compensated for this work.

This step can earn you and your family hundreds or thousands of dollars over the course of a year.


Rule #3 – Protect Yourself – Once you become a personal representative for the estate and the probate process you are not all of a sudden thrown into covering the deceased person’s debts.   You are not personally liable.

However you are liable if you make major mistakes.  If you forget to pay a debtor before giving cash to family members you can be personally liable in some states.  Here are some quick tips that will save you from losing thousands of dollars.

  • Buy homeowners insurance – if your Mom’s old house burns to the ground when it was under your care you will be liable.
  • Estimate values of homes, cars, financial assets conservatively – This can help avoid challenging discussions with banks, probate court and irritate family members.
  • You can walk away – Even if you sign up to run the probate process you can step away from it at any time at no cost. Sometimes this is an important option if the discussions with family members become too contentious.


Probate Case Studies

Below are some common probate scenarios and how the tools above can have a direct financial impact to you and your family.

Scenario 1: Home is the only major asset – $80,000 value

  • Buy home owners insurance
  • Collect home related documents before seeing your lawyer
  • Pay outstanding medical bills and funeral costs

Value To You: Saves you time and money


Scenario 2: Retirement funds and savings are the only assets – $100,000 value

  • Collect retirement fund documents and determine beneficiary
  • Distribute (retirement assets are often not part of probate court)
  • Document $25,000 – $50,000 other items (e.g., jewelry)

Value To You: Saves your time on probate process and increases distribution


Scenario 3: Large amounts of debt – $250,000 owed (e.g., credit cards)

  • Collect all assets and distribute to cover debts
  • Allow court to negotiate with creditors to cancel remaining debt
  • Earn more money in your job

Value To You: Not responsible for other people’s debts



Let’s say your mother or father was wealthy and left significant assets.  Maybe even a few million dollars is left.  My strong advice to you is to get a lawyer.  Look here.

When there is a lot of money at play two things become true.  First, the legal and financial complexities increase exponentially.  Second, the family dynamics become more intense.

Step aside and let the experts deal with it.

Take action now!  Which of the above scenarios is most similar to what your family faces?  Write down three ways that you can maximize your financial outcome and three ways you can take care of yourself during the process.


Advanced Steps

“A journey of a thousand miles begins with a single step”

– Lao-Tzu

Below are advanced steps to smooth out the probate process for you:

  1. Publish A Death Certificate In The Newspaper – This will initiate the probate process with creditors. You’re required to do this if you’re the “personal representative” of the probate process.
  1. Bring The Real Copy Of The Will To Probate Court – Don’t bring a photocopy. You can get this from your loved one’s lawyer.  They want to see the real one.
  1. Take A Look At Legal Forms – This is the Colorado state “Descendants Estate Inventory” form. Review the categories.  Your state may be slightly different.  The categories will be the same however.
  1. Setup A Checking Account and Pay Bills – This is the order in which bills are paid for estates:
  • Estate administration (for example, legal fees and personal representative fees)
  • Family allowances (money to cover family members’ living expenses while the estate is in probate)
  • Funeral expenses
  • Taxes and debt
  • Claims against the estate (payments to beneficiaries)
  1. Start In Under 9 Months – By Federal law estates must file takes within 9 month’s of the owner’s passing.


Congratulations!  Great work.  Now take the first action step and collect one document today.  Don’t wait. 

Published: January 29, 2015
By: JP Adams

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