Is Probate A Bad Thing?

Probate is the legal process by which assets are transferred out of a deceased
person’s estate to his or her heirs and devisees. Probate is required in any state
where real property is owned solely or as a tenant in common by the decedent. In
addition, in North Dakota, probate is required if the decedent died owning $50,000
or more in other probate assets in the decedent’s name.

As part of probate, a court appoints a personal representative or administrator to
gather the decedent’s probate assets and transfer those assets to the person or
persons entitled to receive them.

It is not unusual for clients to ask for their estate plans to be formulated with the
primary goal of avoiding probate. Clients may have heard horror stories about how expensive probate can be. And
in some states, where attorneys are allowed to charge legal fees based on the
percentage value of assets in the estate, the cost of probate can be prohibitive.

North Dakota is not one of the states that allows attorney fees for probate
proceedings to be based on the value of the estate; therefore, in North Dakota most
attorneys charge their regular hourly rate. The effect is that although a complex
probate can be expensive, a simple probate normally is not.

In addition, there are some reasons why a probate proceeding may be a good idea.
A probate proceeding can shorten the period of time in which creditors can submit
a claim against the assets in the estate. As part of probate proceedings, Notice to
Creditors is often published in the newspaper where the decedent lived. If Notice
to Creditors is published as part of a probate process, creditors must submit their
claims no later than 90 days after the date Notice to Creditors is published. If no
Notice to Creditors is published, creditors have three years after the decedent’s
death to submit claims. If assets have already been distributed, those assets may
need to be clawed back to pay any valid claims submitted during the three-year
period.

What Happens When You Die Without a Will?

A concern many people have is whether they actually need a Last Will &
Testament (“Will”). In order to answer that question, it is important to understand
how your property would pass if you do not have a Will. If you die without a
Will, any probate assets you have will pass according to the laws of intestacy in the state you
were domiciled in at the time of your death.

If you died without a Will in North Dakota, all of your probate assets would pass to
your surviving spouse, but only if:

1. You died leaving no surviving children, grandchildren, etc. (“descendants”)
and no surviving parent; or
2. All of your surviving descendants are also descendants of your spouse AND
your spouse has no other surviving descendants.

In essence, this provision limits the ability of a surviving spouse who has children
not in common with the deceased spouse to receive the entirety of the deceased
spouse’s estate. If the above conditions are not met, the surviving spouse is
entitled to a reduced share of the probate assets. Consequently, if you want your
spouse to receive all of your probate assets or a percentage that differs from North
Dakota intestacy laws, you would need a Will to ensure that occurs.

If you died without a Will and left no surviving spouse, your probate assets would
be distributed as follows:

1. First to your descendants by right of representation, (by right of
representation means that children receive a deceased parent’s share); but if
you left no surviving descendants;
2. Then to your parents in equal shares, or to the survivor of them, but if you
left no surviving parent;
3. Then to your siblings by right of representation, but if no one is surviving in
this group;
4. Then to your grandparents and so on.

If none of the persons entitled to receive under the laws of intestacy exist or are
surviving at your death, your probate assets would pass to the state.
If the laws of intestacy are in line with how you would like your probate assets to
be distributed at your death, you may not need a will. But there may be other
reasons why having a Will is a good idea.