Probate is the Court supervised process that occurs after a person’s death, in order to transfer certain property of the decedent to his or her heirs. The process itself varies by State, and New Hampshire’s probate process is more complicated than most. Because of the expense and drawn out process, many people want to avoid probate.
The overall goal of the probate process is to identify and value the decedent’s property, to pay the decedent’s debts and expenses, and to distribute any remaining assets to the proper heirs. If the decedent left a Last Will and Testament, the Will names the heirs of the Estate. If the decedent did not have a Will, the heirs will be identified by State law.
A critical point to understand is that only those assets which were owned by the decedent individually are subject to the probate process. Assets which were owned jointly or in trust are generally not subject to probate. Assets for which there is a beneficiary designation (such as life insurance or IRAs), are also not subject to probate, as long as a beneficiary is specifically named.
Upon request, the Probate Court will appoint an individual (the “Executor” or “Administrator”) to complete the probate process. The Executor is often a family member, but could be a professional such as an attorney. Only the Court appointed Executor has legal authority to access the decedent’s property after death.
The Executor will be required to file a number of documents with the Court and others, including Notices to the heirs, an Inventory of the Estate assets, and in some cases, a formal Accounting of all income received and expenses paid by the Estate. The Executor may need to hire one or more appraisers in order to determine the value of the decedent’s assets.
An Executor may, with the consent of the heirs, sell the decedent’s real estate while the probate process is ongoing. If the New Hampshire decedent owned real estate in a State other than New Hampshire, it may be also be necessary to open probate administration in that other State. Typically “primary administration” occurs in the state of domicile (the State the decedent treated as home) and any other administrations is referred as ‘ancillary.”
The Executor is responsible for making sure that the decedent’s income tax returns were up to date, as well as filing the decedent’s final income tax return. The Estate itself is also a separate taxpaying entity and may have to file its own income tax return.
Under New Hampshire law, creditors of the decedent have six months in which to present their claims for payment to the Executor. As a result, the Estate must remain open for a minimum of six months after the appointment of the Executor. It is not uncommon, however, for a New Hampshire probate proceeding to take a year or longer before it is complete. The heirs of the Estate generally do not receive any money until after the Estate is closed.
A Revocable Trust is often used in New Hampshire as a means of avoiding probate. Assets which are titled in the name of a Revocable Trust are not subject to the probate process. Going through the probate process may be worthwhile in some instances. However, generally, because of the expense and delay in distributing a decedent’s assets, people wish to avoid probate.
© Annis & Zellers, PLLC
This material is introductory and does not constitute legal advice. Please consult with your lawyer for estate planning services based upon your specific circumstances.