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Understanding How The Probate Process Works
Author : Simon Volkov
Submitted : 2011-12-25 01:38:33 Word Count : 646 Popularity: 0
Tags: probate process, probate, inheritance property, probate attorney, last will, estate executor
The probate process is required within the U.S. to settle estates of deceased persons. The time required to settle probated estates depends on several factors including type of inheritance property and estate value, as well as estate planning strategies incorporated prior to death.
The probate process can take several months to complete; especially when decedents die without executing a valid Will. Probate is prolonged when heirs fight over inheritance property or if the Will is contested. Inheritance assets cannot be distributed until estate management duties are completed.
Upon death, decedent Wills must be submitted to probate court. If no Will exists, the death certificate is presented and a probate case number assigned. Once a case number is established, information pertaining to probated estates becomes a matter of public record.
The Will is used to designate a probate personal representative who is responsible for estate settlement duties. If no Will exists, the estate executor is appointed through the court. The manner in which estates are settled depends on the decedent's state of residence. Some state probate laws require estate administrators to obtain court confirmation and obtain court approval for all estate transactions. Other states allow executors to settle estates without court approval.
Estate settlement duties vary greatly and can range from arranging burial to selling real estate or business assets. At minimum, estate executors must settle outstanding debts; secure and inventory personal belongings and inheritance property; obtain property appraisals or date-of-death values; distribute inheritance property to rightful heirs; and prepare a final tax return.
When financial assets and titled property do not transfer to a surviving spouse, the property is passed along to direct lineage heirs. Decedents can bequeath property to whomever they want within their Will. If they do not leave a Will, property is distributed according to state probate laws.
When decedents die intestate (without a Will) estate executors are required to follow established procedures for locating missing heirs. It is best to consult with a probate attorney to adhere to state laws. If heirs cannot be located, but believed to be alive, inheritance property must be secured through a process called escheat. The escheat redemption period can range from 2 to 15 years. Unclaimed property can transfer to the state when escheat expires.
Probate executors are required to publish creditor notices and pay outstanding debts. It can be beneficial to work with a probate lawyer when excessive debt is owed. Creditors will often accept lump sum cash, but can place claims against the estate.
When real estate is involved, estate settlement duties can become complicated. Much depends on estate planning measures taken by the decedent. If the property is owned outright and the decedent bequeathed it within the Will, property transfers are relatively simple.
If real estate is secured with a mortgage note, the estate is responsible for making loan payments, along with taxes, insurance, and property maintenance. If the estate cannot afford real estate costs, Administrators can request court approval to sell the property. In some cases, real estate sales are court ordered. It is best to obtain legal counsel to ensure proper transfer of real estate holdings.
Estate administrators are required to obtain date-of-death values for banking and investment accounts. Account holders can establish beneficiaries for checking, savings, retirement, and investment accounts. When beneficiaries are assigned, funds can be distributed fairly quickly and are not required to pass through probate.
The Internal Revenue Service requires filing a final tax return within 9 months from the date of death. Taxes must be paid in full with the filing.
The final stage of the probate process is distribution of inheritance property. Beneficiaries are required to sign a receipt for property received. Once inheritance statements are approved through the court the probate executor is relieved of duties.
Author's Resource Box
Real estate investor and probate liquidator, Simon Volkov shares estate planning articles via his investment website. Topics include how the probate process works, ways to avoid probate, and inheritance protection strategies. Learn more at http://www.SimonVolkov.com.
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