Let’s face it. Wherever we are, no matter what we do, life will always continue. When that time comes, you may be faced with the responsibility of settling a departed loved one’s legal affairs. If they have left you with a legitimate will, your jurisdiction would need it to provide evidence to distribute the assets lawfully and fairly.
Unfortunately for claimants, the administrator of a probate estate is unlikely to issue inheritances. The same applies to the trustee’s successor and other authorized agents. Before a property can be liquidated or established, it must first follow numerous procedures, including appraising assets and paying any taxes owed.
Collation of the Decedent’s Papers and Assets
Before the probate court assigns a personal representative or a beneficiary assuming control over all the inheritance, they must first collect and identify all documents and other crucial paperwork of the decedent. It could include their last will, memorial services, funeral arrangements, specifications, or revocable trusts.
Additionally, you need to collect vital paperwork, including reports on banks and brokers, inventory, investment records, and insurance policies. Consider acquiring debt information, such as mortgages, personal loans, credit cards, and medical expenses as well. If probate is required and presented to the court, the administrator will be legally appointed by the probate court.
Additionally, if the dead did not leave a will, a plea must be filed to initiate the probate process. On the other hand, if they left a living trust, the succeeding trustee could accept an appointment well without court proof.
Valuation of the Decedent’s Property
It is necessary to establish the total worth of the assets of the deceased. The majority of state probate courts demand the submission of a complete inventory of all properties possessed by the decedent and the accompanying valuations. This could include accounts, vehicles, shares and dividends, and even pets.
This process is significantly vital information for recipients. Should they choose to sell an asset, any tax on capital gains will be determined using these values. This is known as a stepped-up basis. Any capital gains would be calculated on the gap between the selling price and the cost paid by the deceased to acquire the item, which may be a significant amount higher.
After deducting the deceased’s unpaid loans, the total worth of their assets, including some gifts given to spouses, partners, or institutions, and estate administration fees, will determine whether the estate will be responsible for state or federal taxation.
Making Final Payments on the Decedent’s Liabilities
Prior to the probate estate closing and transferring the cash funds to claimants, fees must be paid to the deceased’s remaining debts, lenders, and ongoing administrative expenses. This process occurs following the valuation of the dead person’s property. Estate executors must notify all prospective deceased creditors whether they are familiar with them or not.
This step is usually accomplished by publishing a notice informing creditors of the death and advising them on how to file claims against the estate for money owing to them. After then, lenders have a certain amount of time to file claims. Depending on state legislation, the deadline may be somewhere between three to nine months, although it may run concurrently with the inventory period in other places.
The administrator is then given additional time to determine if the claims are genuine and whether claims are justified or not. Not honoring allegations may lead to a slew of court proceedings where the court will decide, all of which take a long time.
Distribute Any Remaining Funds to Beneficiaries
The estate distribution phase is the last in the procedure for a reason. This stage eliminates any potential accountability for outstanding fines and other debts owed to trustees. After the formal complaint is filed, the account’s assets are dispersed according to the provisions specified in the last will.
Note that problems with document verification at the initial court filing could cause the process to take longer or, worse, be postponed. Thus, consider enlisting assistance when serving legal papers or filing them safely and adequately. This step will save you more time and lessen the burden of the already taxing process.
The length of the settlement process is determined by the factors mentioned. It generally takes a shorter period to handle a minor estate or trust. However, a complex one could take a year or longer.
Note that you should only use your research for reference and informational purposes and should not be considered legal advice. It’s still best to consult with your legal team should your situation require special or specific attention.