If you are reading this article, there is a good chance that a loved one has passed away and we would like to share our condolences. You may now need to figure out how to handle the probate process for your loved one.
So, what is a probate?
Probate is a process where a court will essentially oversee a responsible person collecting all the assets from the deceased person and then delivering them to the proper recipients. This can range from a fairly simple matter to a huge court case, depending on what is in dispute.
If the deceased had a will, it likely named a family member or legal professional as an executor. In that situation, a court will appoint the executor to manage the deceased person’s estate unless there is some dispute over the validity of the will. If there was no will, somebody will need to step forward to administer the estate. Usually this person is a family member, but in most situations anyone can become the administrator by petitioning a court. If more than one person petitions, the court will pick the best one for the job.
Once there is an executor or administrator in place, that person will begin identifying and collecting all of the deceased person’s property. They generally have a great degree of flexibility in how to handle the property.
For example, personal property like furniture could be sold at an estate sale because cash is easier to manage. The administrator or executor will generally need to secure a tax identification number from the U.S. Internal Revenue Service and then open a bank account for the estate. Eventually, the person in charge will come up with a full list of the assets in the estate. The public is also given a period of time to make claims against the estate. For example, a credit card company will typically claim from the estate any money it was owed by the deceased.
Next, the administrator or executor will need to disburse the assets in the estate. Each state has its own rules for how this is handled. Items like funeral expenses are usually paid first. After that, other debts and taxes get paid off. Sometimes that will eat up all the assets in an estate. If, however, all of the debts of the estate are paid off and assets are left over, those will be distributed. A will generally lays out where all the property should go. If there is no will, state’s probate law will usually send the assets to the children of the deceased, or other family members if there were no children.
The probate process
This whole probate process can be expensive and time consuming, and you most likely will need a lawyer’s assistance. Many states have created simplified procedures for small estates to help ease the burden, but it is usually best to try to avoid probate entirely. Many assets can be transferred outside the probate process. For example, a bank account can designated to “pay on death” to specific individual, like a child. That means the bank will simply transfer the contents of an account to the child who can take ownership immediately without having to involve the courts. A good lawyer can set you up with a strong estate plan to minimize the need to deal with probate.
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