Probate is the process of counting up, selling and distributing the assets of someone who has died without leaving a usable will.
Some states have probate judges, and some have probate courts, but all have probate cases. In general, the probate process begins when an heir, a lawyer hired by an heir, or a court appointee files a Petition for Probate with the court. She then publicizes the petition in local newspapers and sends copies to legal heirs.
At the probate hearing, the judge scrutinizes the will, if any, to make sure it's really invalid. If so, she appoints an executor or administrator -- sometimes called the personal representative -- to handle the estate.
It often takes a year for the administrator to secure all the decedents' assets. For real estate, art work, fine jewelry, fancy cars and other assets of indeterminate value, the administrator hires an appraiser to put an accurate value on each. The administrator then writes up for the judge a summary of the remaining assets, as well as probate costs and assets sold to pay for them.
If all goes as expected, the judge gives the administrator the go-ahead to distribute the remaining assets.
Miscellaneous Property
Often, an estate's value is clustered into a few salable assets that can't be split: say, Dad's 1935 Cadillac or Mom's Tiffany lamp -- and, of course, real estate. Laws differ from state to state, but the legal heirs may come to an agreement on assets that one or the other wants in place of cash, or one heir may buy out the others' interests in a particular asset. Ultimately, the administrator may can make decisions without the heirs' permission.
The administrator sells each major asset at a respectable price, if possible. Administrators often use an estate sale for personal belongings remaining in the decedent's house while the rest goes to auction. During these sales, disappointed heirs can buy property they couldn't get beforehand. Estate sales are a form of probate sale.
Sometimes the court puts assets up for public auction, with prior notice to the public. This is another form of probate sale. In June 2015, auction postings in Marin County, California included a spoon collection and a 27-foot trimaran. You may be able to sign up for auction notices in your local area.
Real Estate
Among all items sold under probate, real estate draws the most attention. Supposedly, prices are cheap. In fact, the administrator hires a realtor who markets the house just like any other. The bid typically must be at least 90 percent of the list price.
Bids for probate property typically require a 10 percent deposit that is not usually refundable. In property sales, once a bid is made, the administrator requests confirmation from a judge, who then sets a date of sale up to a month and a half later.
Other would-be buyers can top the existing bid right up until the sale is finalized and sometimes there is drama. If any other potential buyers show up with deposit money in hand, the court is auctioneer until the property sells, and the deposit is required on the spot.
