It is a wise choice to be diligent about saving and managing your money so that when you pass, you may leave as many assets as possible to your heirs. The process to complete this transfer of property after you die is called probate.
Probate is a legal process used to authenticate and distribute the instructions of a will. The process settles the deceased’s debts and administers how property is passed to beneficiaries and heirs. The court decides and distributes the assets if a person dies without a will.
If there is a will, an executor should be named to manage the details of the estate and take care of its affairs. If there was no will, the court will appoint an administrator to handle this role. Regardless of if there is a will, these are three steps the probate process can be divided into:
Asset collection, appraisal and inventory
One of the first duties of an executor is to inventory the estate’s assets. This will include money owed to the deceased. All account numbers from banks, brokerage accounts, etc. will need to be collected. Real estate and high value collections such as art or antique cars will likely need to be professionally appraised. Beneficiaries are likely to scrutinize this information so details and accuracy are very important.
Identify creditors/pay bills
The executor will need to identify and notify all creditors of the death. A death notice may need to be published in the local newspaper to alert creditors that have not been reached. Creditors will have a window of time from the notice to make any claims on the estate for money owed. The executor is never personally responsible for paying back any debts of the deceased.
The executor will also need to file the final income tax return for the deceased. During this time, a determination will be made if the estate is liable for any inheritance taxes. If so, they will file those tax returns as well. Estate taxes are typically due within nine months of the deceased’s death.
Distributing balance of the estate to the beneficiaries
The executor or representative can petition the court to allow the distribution of what is left in the will to the beneficiaries once the above steps are completed.
Wrapping up a person’s affairs through probate is usually necessary. The process of probate may seem daunting and confusing but often goes smoothly. There are times complicated estates or an heir contesting the probate can slow things down. If there are questions about the process, they can easily be answered by an expert in probate matters.