Probate

According to the Kansas Bar Association, "Probate is a court procedure where the validity of a will is proved or disproved. It involves all estate administration proceedings. When a person dies, all property, other than property passing directly to others (such as property held in joint tenancy, life insurance proceeds and retirement plans payable to a named beneficiary), may be subject to a probate proceeding. An estate is generally probated in the county where the deceased owned property. If property is located in another state, additional proceedings are sometimes necessary in that state."

Jurisdiction
In the US, probate is governed by each state's laws regarding inheritance and the administration of estates. In 1964 the National Conference of Commissioners on Uniform State Laws drafted a Uniform Probate Code designed to update and standardize the nation's probate code. Twenty states have adopted the code, with the remaining states adopting various sections of the code. A wide variety of state courts (commonly district courts, circuit courts, probate courts, or other court) will handle probate. Probate is held in the county court where the deceased had residence. If the deceased holds real property in more than one state, a separate probate proceeding for each property is often required. Most states (with the exception of Delaware and Virginia) have adopted simpler probate procedures, usually termed "summary probate" for very small estates

Findlaw.com. spells out the types of probate:
 * "Supervised: The most formal and expensive method. The court plays an active role in approving each transaction. In states where it's optional, supervised administration is used for contested estates, when an interested party requests it, or when the executor's ability is questioned.
 * Unsupervised or independent: A simpler, cheaper method in which the number of duties and procedures is reduced and the court's role is diminished or eliminated. It's used for estates that exceed the asset limit for small-estate administration (see below) but don't require heavy court supervision. It often requires consent of all beneficiaries, unless the will specifically requests unsupervised administration.
 * Small estate: The simplest and fastest probate, it's not available in every state and where it is only for small estates, ranging from $1,000 to $100,000, depending on state law. Property is often transferred by affidavit. Small estate administration often lasts only a few weeks."

The probate process
If an individual dies intestate (without a will) or disposes property by will, the estate will be subject to probate. The basic probate process includes the following steps:
 * Swearing in your Personal Representative (also referred to as executor/executrix or administrator/administratix);
 * Notifying heirs, creditors, and the public of your death;
 * Inventorying your property;
 * Paying bills, taxes, and distributing the estate, which can include the following costs:
 * Estate administration costs (legal advertising, appraisal fees, personal representative fees, attorney fees, etc.);
 * Family allowances (For support of family members);
 * Funeral expenses;
 * Taxes and other debts (medical bills, etc.);
 * All remaining claims; and
 * Whatever is left after creditors get their money is distributed to the beneficiaries named in the will. If there is no will, the laws in your state determine how and to whom the remaining property is distributed. Depending on the complexity of the estate, probate can take from three months to two or more years to complete.

The probate estate
At an individual's death, the property owned by the individual is divided among property that is subject to probate, known as the probate estate, and the non-probate estate for property which can be directly passed on to beneficiaries. In general, assets held in living trusts, assets held in joint tenancy with rights of survivorship, and assets held in entities with beneficial interests (personal retirement plans, employer retirement plans, deferred annuity contracts, life insurance death benefits, payable on death (POD) accounts, and transfer-on-death accounts (TOD)) are not included in the probate estate, provided that beneficiaries are named, and that the estate is not the beneficiary.

One major difference between probate estate accounting and net worth accounting regards the value of indebted property (most applicable to real estate). While a net worth statement values real estate net of the mortgage value (for example a $1,000,000 home with a remaining $750,000 mortgage value would hold a $250,000 equity net worth value), the probate estate values the property without considering the mortgage. Thus the home would be valued at $1,000,000 dollars at probate, and probate fees would be applied to this value.

The importance of naming proper beneficiaries for various property arrangements for reducing the probate estate is highlighted in the following table.

Note: Property (usually real estate) held in various forms of joint tenancy (or community property) with survivorship are not probate assets when the first spouse dies. However, since the property is no longer jointly owned, the property can be subject to probate upon the death of the surviving spouse.

Probate costs
Probate incurs costs. These costs include emotional and time costs in addition to the measurable financial costs. Probate's financial costs vary from state to state and are related to both the size and complexity of the probate estate. In general, probate costs are estimated to range between 3% and 8% of the estate value. A handful of states (California, Iowa, Nevada, and Wyoming) have set fee schedules for probate costs, while other states use "reasonableness" or judicial discretion as the standards for probate fees. Attorney fees are often negotiable, although grieving survivors are often ill-suited for negotiating sessions.

The following table breaks down the fixed schedule probate costs for California:

Avoiding probate
Given the costs, delays, and emotional toll of probate many people will seek to avoid the procedure. Keep in mind that the following property entities avoid probate:
 * Assets held in a revocable living trust;
 * Assets held in joint tenancy;
 * Joint Tenancy with a Right of Survivorship;
 * Tenancy by the Entirety;
 * Community Property with a Right of Survivorship;
 * Retirement accounts;
 * Payable on death accounts (POD;
 * Transfer on Death Registrations (TOD).

The following table provides information regarding probate avoidance options available in US states.

Keep in mind that joint property will pass to the joint owner on the first joint owner's death, but the asset will be subject to probate on the second joint owner's death unless the property in retitled into a non-probate entity. For real estate, naming non-spouse beneficiaries (usually the children) is often not recommended since the surviving spouse would now be liable to the children's creditors, and because the joint tenancy is irrevocable. An alternate strategy is to place the real estate in a revocable living trust. For jointly held savings bonds, the inheriting spouse can avoid probate costs be re-registering the savings bonds with a payable on death form (or hold them in a revocable living trust). Similarly, a joint bank account can be retitled as a payable on death account (or held in a revocable living trust).

One instance where probating an estate might prove beneficial is a situation where an estate has a large number of creditors. The probate procedure will place a time limit for creditors to make their claims on the estate. In this situation, an estate representative might decide to place a limited amount of estate assets sufficient to pay creditors into the probate process, while keeping the rest of the estate's assets in the non-probate estate.

Also, even if a decedent's estate is removed from probate, the estate must pay legitimate creditor claims and taxes due (both income and estate and/or inheritance taxes). Thus an estate representative should delay distributing the estate to beneficiaries until these claims are satisfied.