Not all assets owned by a decedent are subject to the Probate Court’s jurisdiction. For example, property that is held in joint tenancy, property that is held in trust for another, life insurance with designated beneficiaries (other than designating the beneficiary as being “my estate”), pension, profit-sharing plans and IRAs with designated “pay on death” beneficiaries, real estate with a TOD (transfer on death) beneficiary, and non testamentary transfers of property, are examples of property that is not subject to probate.
Probate is the process of transferring title to property from the name of the decedent to the names of the persons entitled to inherit. Property owned in the decedent’s individual name, property held as tenancy in common, and insurance policies with the death beneficiary being designated as “my estate”, are properties which must be probated. If a person dies with a will, the estate will be distributed in accordance with the terms of the will (assuming the estate is solvent and the will is not contested). If there is no will, the Legislature has determined what a reasonable person would probably do, in the event of his or her death; absent a will, a person’s estate will be distributed according to the Legislature’s edicts (commonly referred to as the Statute of Descent and Distribution).
The probate procedure in Oklahoma is not particularly difficult, though it does take time and is not necessarily inexpensive. The probate estate cannot be closed until a closing letter has been issued by the Internal Revenue Service, if the estate exceeds the sum of $5,250,000. If the estate is not required to file a Form 706 (Federal Estate Tax Return), then that fact is noted in the final account.
The traditional probate procedure begins with the filing of a will, accompanied by a petition to admit the will to probate. A public hearing is held, and all interested parties (heirs and persons noted in the will) are notified of the hearing. The Court will normally appoint whoever is designated in the will as the Personal Representative, and the Personal Representative then becomes, in effect, a representative of the Court in carrying out the duties required by statute.
Among those statutory duties, the Personal Representative must notify the creditors of the decedent, not only by publishing a newspaper notice of the death of the decedent, with instructions to all creditors to file a written claim against the estate, but also contacting the known creditors directly and advising the creditor to file the claim within the 60 day statutory period of time permitted by law.
Though inventories may be waived by the Court, they are normally filed with the Court Clerk. An inventory is a list of the probate property owned by the decedent, and in it, the property is valued as of the date of the decedent’s death. The Federal Estate Tax Return is not filed with the Probate Court (it is a private document), but once the Internal Revenue Service issues its closing letter (which is the equivalent of a tax release), it is filed with the Probate Court.
After the closing letter is in hand, and the statutory time for filing claims against the estate has expired, the estate can be closed. The final action in closing the estate begins with the filing of a final account. Another public hearing is held, and after the Court approves the final account, distribution is made to the heirs. At that time, the Personal Representative is discharged from his or her duties.
If everything is done in a timely fashion, the probate of a case can normally be concluded within 5 months. However, experience has shown that nothing is ever done in a timely fashion, and that the probate procedure will normally take 7 – 10 months. The fees incident to probate include not only the filing fee (close to $180), other court costs to be paid at a later date, personal representative’s fee (normally 2.5% of the value of the estate) and attorneys fees (which in all likelihood will be no less than $2,500).
As a footnote to this article, please understand that there are techniques available to shorten the time required to complete a traditional probate, which may reduce legal expenses. These techniques may not be available in every case. The purpose of this article is to give an overview of the traditional probate procedure in Oklahoma.
©2013 James H. Beauchamp