Probate is the legal procedure of administering an estate after death. Said otherwise, it’s where an Oregon court oversees the distribution of a person’s assets. The law essentially demands that no assets are left behind and abandoned because it creates an administrative nightmare for the state [see https://unclaimed.oregon.gov/ for stuff that has been left behind]. Probate ensures that stuff goes where it’s supposed to go, either based on a will or through intestacy. The will is “proved” and delivered in court, a representative is selected to manage the estate, creditors are told that the debtor died, I’s are dotted and T’s are crossed. It ensures that title to land is not held by the deceased, ensures the disputes and whatnot lingering against the estate are paid out before the money is sent to other people, in general just ensures that the whole post-death process is micromanaged accurately. As a general matter, it’s very hard to claw money back from someone when it has been mailed improperly and harder still to undo an erroneous real property deed, so probate serves a necessary purpose. It takes 4 months minimum to close a probate, but more complex tax or property matters can make it take longer. It’s not fun, it’s not cheap [probate has costs and fees that are drawn out of the estate before others are paid out of the estate, and things like lawyers and newspaper publications are typically quite expensive], but it’s necessary.
If a property is “in probate,” that means that there’s an ongoing probate matter that may need to be resolved. Property can still be sold out of the probate estate, but will have additional watchguards and requirements which typically delay the sale substantially [at the minimum, the probate court will need to authorize the sale], and permissions may not be easily obtained. There could easily be a scenario where the court will not approve the sale out of probate until all other debts are paid off in full, which may require the full closing of probate before the sale can continue. It is highly recommended that you consult specialists or take specific courses on sale of property in probate before taking on probate transactions.
Separately, there are some ways that people avoid the expense and complexity of probate; the primary two ways being “simple estates” and trusts.
- Simple Estates – estates worth less than $275,000 [at most $75k in personal property, at most $200k in real estate value or manufactured home value], the estate can file to avoid the full probate procedure as a result of the estate being deemed “too small” to need the full process. If the person died with a will, there’s a minor variation on the process that asks “did less than the $275k split occur within specific devises of the will, assuming everything else in the estate was devised to a Trustee of a trust that the deceased created prior to their death”
- Trusts – when assets are held by a trust, the trust doesn’t die when the beneficiary of the trust does. As a result, the deceased person has a small estate with nearly no value in it and the trust retains the value of their assets without necessarily requiring the probate procedure. If done improperly, e.g. the deceased person accidentally personally bought a $76,000 ring the day before they died and didn’t give the ring to the trust, the trust won’t avoid probate because the individual will still retain enough value to not be classed as a “small estate.”