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Wendell L. Belknap
411 5th Street
Oregon City, OR 97045

Tel: 503-657-8946
Fax: 503-655-2775

Email Wendell
wendell@belknaplaw.com

Website:
www.belknaplaw.com

Probate




Frequently Asked Questions (FAQs)


1. What is “Probate"?
2. When is a “Probate” needed?
3. Can I file the “Probate” anywhere I want?
4. What happens during the “Probate” process?
5. How long does “Probate” take?
6. Do I need a lawyer?
7. What are the costs involved?
8. Will more taxes be owed because there is a “Probate”?
9. What is a "small estate" proceeding?

1. What is “Probate”?
Probate is a legal process whereby a court oversees the distribution of assets and payment of debts left by a deceased person. During the “Probate” process, the Personal Representative will handle all aspects of the assets and debts of the deceased person, until the case is closed and the assets distributed to their rightful recipients.
2. When is a “Probate” needed?
Probate is not always necessary. When a loved one dies and has property titled solely in that party’s name, such as a home or bank account, then a “Probate” will be necessary. If the deceased person owned only personal property for which there was no title evidencing ownership, or if the assets owned by the deceased person were co-owned with another person such that they transfer automatically to that co-owner, then a “Probate” will not be necessary.
3. Can I file the “Probate” anywhere I want?
The “Probate” must be filed in a county in which the deceased person lived, or owned property. Since most persons have a bank account, and since most banks have branches in every county in the state, the “Probate” generally can be filed in a county convenient to the Personal Representative.
4. What happens during the “Probate” process?

The estate is opened. This means that a Petition is filed with the court. If the deceased person left a will, the initial step in the probate process is to have the will admitted as being valid (the courts call this having the will “proved”) and the person nominated in the will appointed as the Personal Representative. If the deceased person did not leave a will, then the first step will be the opening of an estate and the appointment of an Administrator (like a Personal Representative, but for cases with no will). This person is usually the closest heir of the deceased person. Regardless which process applies, the court will appoint a person to act on behalf of the estate.

Once a Personal Representative or Administrator is appointed, a notice to creditors is published in a local newspaper. This public notice tells any creditors or persons with a claim against the estate that they have four months to bring any claim against the estate for debts the deceased person owes them. At this time, the Personal Representative also gives written notice to all known and possible creditors, as well as to the heirs of the deceased person and the people named in the will.

Upon appointment, the Personal Represent identifies the assets of the estate and their values, and an Inventory is prepared and filed with the court.

The Personal Representative pays the debts of the deceased person. It is the law of the State of Oregon that creditors must be repaid from the estate before the remaining estate assets can be distributed to the rightful beneficiaries. The Personal Representative must complete and file a document labeled an “Affidavit of Compliance Respecting Search for Claims and Notice to Claimants,” verifying for the court that the Personal Representative has searched to determine what creditors exist, and then paid them.

Usually with the help of an account, the Personal Representative prepares state and/or federal tax returns in the name of the deceased person for income earned before the person died, if necessary. In some cases, it may also be necessary to prepare and file a tax return on behalf of and in the name of the estate, for income earned by the estate while the “Probate” process took place. And, in even fewer cases, the Personal Representative will file any inheritance, gift and/or estate tax returns and pays any taxes due, if any.

Most of the time, upon the passage of four (4) months after publishing the notice in the newspaper, the Personal Representative can consider closing the estate. This can consist of either a full-blown accounting to the parties who are entitled to receive the estate assets, which accounting lists every penny that came into the estate, as well as every penny that was spent as part of administration of the estate, or, more-commonly in estates I handle, it consists of a document labeled a “Verified Statement in Lieu of Final Account,” which is signed by the Personal Representative and all parties who are entitled to receive the estate assets, asking the court to distribute the estate assets without the need of a full accounting. In this instance, the parties who are entitled to receive the estate assets may still talk to the Personal Representative informally about income and expenses, but choose not to make it part of the court record, which only slows matters down and increases the expenses of administration, such as attorney’s fees.

After court approval of the account and payment of all unpaid probate expenses, the deceased person’s assets are distributed to the people named in the will or, if the person died without a will, to the heirs of the deceased person. These people sign and return Receipts verifying that they received their money, which Receipts are filed with the court, and the estate is closed.

5. How long does “Probate” take?
Probate can be started immediately after death and under the best case scenario takes a minimum of six months. If the estate includes property that takes a while to sell, or if there are complicated tax or other matters, the “Probate” process can take longer.
6. Do I need a lawyer?
That depends. In Multnomah County, based on a local court rule in that county, the Personal Representative must be represented by an attorney or obtain a court order allowing the Personal Representative to proceed without a lawyer. My experience is that the court in Multnomah County is unlikely to allow a Personal Representative to proceed without a lawyer. To the best of my knowledge, all other counties in the State of Oregon allow a Personal Representative to proceed without a lawyer. Perhaps the answer to this question can be found by examining the basis for the local rule in Multnomah County. The local rule in Multnomah County is in place because, while the “Probate” process is not complex for an experienced “Probate” attorney, it is cumbersome and not readily understood by non-lawyers, resulting in too many errors and problems with persons who try to handle a “Probate” without the benefit of an attorney. Because of this, while an attorney is not “required,” I believe it is “advisable” for a Personal Representative to be represented by an attorney, so the process goes smoothly.
7. What are the costs involved?
That depends on the particular facts of each “Probate.” Classic examples of costs one can expect to incur in a “Probate” are:
  1. Filing fee: Most counties have a sliding scale for the filing fee based upon the value of the estate. By way of example, an estate with a value between $100,000.00 and $500,000.00 that is filed in Clackamas County, Oregon, requires a filing fee of $457.00.
  2. Publication of notice to creditors: This cost will depend on which newspaper you use to publish. The newspaper I use currently charges $134.00 to publish.
  3. Accountant fees: This depends so much as to how the accountant is used that it is impossible to specify an amount here. Possible services provided by the accountant include, but are not limited to, obtaining a federal identification number for the estate, filing personal state and federal tax returns for the deceased person, filing estate tax returns, calculating taxes owed, as well as other services.
  4. Appraisal fees: If the deceased person owned real property (land and/or buildings), there are tax reasons which will probably make having an appraisal as to the value of that real property performed. My experience is that the cost of an appraisal of residential real property is likely to be in the $400-$500 range. The cost of an appraisal of commercial real property is likely to be quite a bit higher than this.
  5. Personal Representative fees: The Personal Representative is entitled to a fee from the estate based on the value of the estate. Some Personal Representatives take this fee, and some do not. For the most part, the fee is $1,630.00, plus two percent (2%) of the value of the estate above $50,000.00.
  6. Attorney’s fees: As with accountant fees, this depends upon what services are requested and provided that it is impossible to specify an amount here.
  7. Bond premium: An Administrator in an estate without a will must obtain a bond. The purpose of the bond is to compensate the heirs of the estate if the Administrator misuses estate assets. The cost of this bond depends entirely on the value of the assets of the estate. For example, the minimum bond required by Clackamas County is $10,000.00 (the premium for a bond of $10,000.00 is generally $100.00) in an estate with few assets, or estates in which the use or transfer of estate assets is restricted. The bond requirement (and corresponding premium) is much higher in estates with more assets. The minimum bond amount varies from county to county.
8. Will more taxes be owed because there is a “Probate”?
No. This is a common, but mistaken question. The amount of taxes owed by an estate depends on the value of the estate, and not the process used to transfer the estate to third persons upon the death of the property owner.
9. What is a "small estate" proceeding?
Oregon allows a simplified process for small estates that would otherwise require a full probate. If an estate fits in this category, the cost and time for distributing the estate assets is greatly reduced. The procedure involves filing a document called an "Affidavit of Claiming Successor." This simplified process is available if the estate’s personal property is valued at no more than $75,000.00 and real property is valued at no more than $200,000.00, for a total aggregate estate value of no more than $275,000.00. Real property includes land and buildings or structures placed on land, such as houses, commercial buildings, and/or agricultural buildings. Clients often mistakenly believe that “value” means “equity.” “Value” as used in the small estate statute means the fair market value of the real property. By way of example, if there is a home worth $295,000.00, but there is a loan or other mortgage against the home in the amount of $200,000.00, the “value” is $295,000.00, but the “equity” is only $95,000.00. A small estate is not an option under this example. Personal property includes all other property, such as cars, boats, clothing, stocks, bonds and personal items.