If you read the conventional advice for executors, the first step is usually “hire a lawyer.” And you may well decide, as you wind up an estate, that you want legal advice from an experience lawyer who's familiar with both state law and how the local probate court works. Not all executors, however, need to turn a probate court proceeding over to a lawyer or even hire a lawyer for limited advice. If the estate that you're handling and doesn't contain unusual assets and isn't too large, you may be able to get by just fine without a lawyer's help.
To determine whether or not you may be able to go it alone, ask yourself the questions below. (If you don't know the answers, ask a lawyer—before you agree to hire the lawyer to handle things for you.) The more questions you answer with a “yes,” the more likely it is that you can wrap up the estate without a professional at your side.
Can the deceased person's assets be transferred outside of probate? The answer to this question depends on how much (if any) probate-avoidance planning the deceased person did before death. Ideally, all assets can be transferred to their new owners without probate court. Some common examples of assets that don't need to go through probate are assets are held in joint tenancy, survivorship community property, or tenancy by the entirety. Assets held in a living trust can bypass probate, too. Probate is also unnecessary for assets for which the deceased person named a beneficiary—for example, retirement accounts or life insurance policy proceeds.
Learn more about probate avoidance.
Does the estate qualify for your state's simple “small estate” procedures? It's best if no probate at all is required, but if that isn't an option, figure out whether the estate can use “small estate procedures. In most states, these include streamlined “summary probate” and an entirely out-of-court process that requires presenting a simple sworn statement (affidavit) to the person or institution holding the asset. Every state has its own rules on which estates can use the simpler procedures. But in many states, even estates that are fairly large—not counting nonprobate assets—can use the simpler processes.
Are family members getting along? Will contests are rare, but if a family member is making noises about suing over the estate, talk to a lawyer immediately. Probate lawsuits tear families apart and can drain a lot of money from the estate in the process. A lawyer may be able to help you avoid a court battle.
If probate is necessary, is your state's probate process relatively simple? If the state where the deceased person lived has adopted a set of laws called the Uniform Probate Code, probate should be pretty straightforward. In UPC states, most probates are conducted with minimal court supervision. A few other states have simplified their procedures without adopting the UPC.
To learn about probate in UPC and non-UPC states, and find out which group your state is in, see “How the Probate Process Works.”
Does the estate contain only common assets, like a house, bank or brokerage accounts, vehicles, and household goods? Things get much more complicated when an estate includes a business, commercial real estate, or any other asset that requires special ongoing handling. You'll probably want to consult experts if you need to manage, appraise, or sell a business; these jobs aren't for amateurs.
Is there enough money in the estate to pay debts? If there's enough money to pay legitimate debts (for example, final income taxes, expenses of the last illness, and funeral costs), with some left over for beneficiaries under the will or state law, you won't have to figure out which debts to pay. If, however, your initial investigation reveals that there may not be enough money in the estate to pay debts and taxes, don't pay any bills before you get legal advice. State law gives some creditors priority over others.
Is the estate too small to owe either state or federal estate tax? Under current law, more than 99.7% of all estates don't owe federal estate tax, so you probably don't need to worry about that. There's a greater chance (though still a small one) that the estate will owe a separate state estate tax to the state where the deceased person lived or owned real estate. Close to 20 states impose their own estate taxes, and many of them tax estates that are valued at $1 million or larger. You'll certainly need expert legal and tax advice if the estate must file an estate tax return, either with the IRS or the state taxing authority.
For information about state taxes, including a list of the states that impose them, see “State Estate Taxes.”