Estate Settlement

Estate Settlement

Sometimes estate settlement is one of the hardest aspects of dealing with the death of a family member. This doesn't have to be the case if proper preparation of all estate documents took place prior to the death. If you have the services of an experienced estate lawyer at your disposal, there can be even less worry and strife.

Wills, probate, administrator, social security benefits, veterans benefits, insurance benefits, joint property, estate taxes and other issues may appear overwhelming after the death of a loved one. Sorting and settling all the details may be confusing because many of the terms are unfamiliar. Please feel free to print this document. This guide is not intended to be a substitute for specific individual tax, legal, or estate settlement advice, as certain of the described considerations will not be the same for every estate. Accordingly, where specific advice is necessary or appropriate, consultation with a competent professional is strongly recommended. Most of all keep in mind that while it is important to take care of all of these activities, it's more important to move slowly at a pace that is comfortable for you during your grieving process.

What is Probate?

Probate: the official proving of a will. The probate process is intended to establish the legal validity of a will but it involves so much more than merely confirming that the signed, witnessed, and registered copy of a will is authentic.

The Probate Process

In addition to proving in a court of law that the deceased individual's will is valid, probate also declares the probate process also involves:

  • identifying and inventorying the deceased's personal and real property
  • having the property appraised
  • paying debts and taxes
  • distributing the remaining property as the will (or if there is no will, then state law) directs
Why is Probate necessary?
The primary function of probate is transferring title of the decedent's property to their heirs and/or beneficiaries. If there is no property to transfer, there is usually no need for probate.  Another function of probate is to provide for the collection of any taxes due by reason of the deceased's death or on the transfer of their property. 

The probate process also provides a mechanism for payment of outstanding debts and taxes of the estate, for setting a deadline for creditors to file claims (thus foreclosing any old or unpaid creditors from haunting heirs or beneficiaries) and for the distribution of the remainder of the estate's property to ones' rightful heirs. 

How long does Probate take?
Answer: The duration varies with the size and complexity of the estate, the difficulty in locating the beneficiaries who would take under the Will, if there is one, and under state law.  If there is a Will contest, or anyone objects to any actions of the Personal Representative, the process can take a long time. Some matters have taken decades to resolve.

What is the probate process of an uncontested will?
Typically the person named as the deceased's Personal Representative (a more formal term is "Executor" or "Executrix") goes to an attorney experienced in probate matters who then prepares a "Petition" for the court and takes it, along with the Will, and files it with the probate court. 

The lawyer for the person seeking to have the Will admitted to probate typically must notify all those who would have legally been entitled to receive property from the deceased if the deceased died without a Will, plus all those named in the Will, and give them an opportunity to file a formal objection to admitting the Will to probate. 

A hearing on the probate petition is typically scheduled several weeks to months after the matter is filed. Depending on the state, and sometimes who the named beneficiaries are, how long before the death the Will was signed, whether the Will was prepared by an attorney, who supervised the "execution" of the Will, and/or whether the Will was executed with certain affidavits, it may be necessary to bring in the persons who witnessed the deceased's signature on the Will. 

If no objections are received, and everything seems in order, the court approves the petition, appoints the Personal Representative, orders that taxes and creditors be paid, and requires the Personal Representative to file reports with the court to assure all the deceased's property is accounted for and distributed in accordance with the terms and conditions of the Will.

Who is responsible for handling probate?
Answer: In most circumstances, the executor named in the will takes this job. If there isn't any will, or the will fails to name an executor, the probate court names someone (called an administrator) to handle the process -- most often the closest capable relative, or the person who inherits the bulk of the deceased person's assets.

If no formal probate proceeding is necessary, the court does not appoint an estate administrator. Instead, a close relative or friend serves as an informal estate representative. Normally, families and friends choose this person, and it is not uncommon for several people to share the responsibilities of paying debts, filing a final income tax return and distributing property to the people who are supposed to get it.

Should I plan to avoid probate?
Answer: Probate rarely benefits your beneficiaries, and it always costs them money and time. Probate makes sense only if your estate will have complicated problems, such as many debts that can't easily be paid from the property you leave.

Whether to spend your time and effort planning to avoid probate depends on a number of factors, most notably your age, your health and your wealth. If you're young and in good health, a simple will may be all you need -- adopting a complex probate avoidance plan now may mean you'll have to re-do it as your life situation changes. And if you have very little property, you might not want to spend your time planning to avoid probate. Your property may even fall under your state's probate exemption; most states allow a certain amount of property to pass free of probate, or through a simplified probate procedure. But if you're older (say, over 50), in ill health or own a significant amount of property, you'll probably want to do some planning to avoid probate.

    What Happens When There is No Will

    When someone dies without leaving a dated, signed and properly witnessed will, the court decides who should receive the deceased's assets. It won't matter what your familial relationships were really like; the state will award property and cash to the survivors based solely on their legal relationship to the deceased. This is called dying 'intestate'. Generally only spouses, common-law spouses, and blood relatives inherit under intestate succession laws. 

    All this can be avoided, if you take care of things ahead of time. When you leave documents that clearly state who you wish to get your property and cash after you die, you better support your survivors in coming to terms with your death without leaving them with a lot of unnecessary distress.

    Hiring an Attorney

    Losing a loved one can be an overwhelming experience and when you add in estate settlement issues, the months following the death can be much more than we bargained for. That's when it might be advantageous to hire an attorney.

    When faced with this situation, it's best to turn to the experts in estate settlement. 

    Bank and Safety Deposit Boxes

    Because banks are subject to both state and federal regulations, procedures can vary greatly from bank to bank and state to state. Some states have been known to automatically freeze joint bank accounts when one of the joint owners dies. To avoid problems, contact your bank directly, to determine the amount of money accessible and learn the procedures for releasing these funds, and to establish a new account for funds received after the death. At least one joint checking or savings account should be left open for at least six months. This will allow you to deposit any checks that you are entitled to but are in the deceased's name. For instance, "Insurance Reimbursement Check". This check would be endorsed on the back as follows: "Deposit Only" with the deceased's name PRINTED underneath, followed by the bank account number.

    If after six months you want to take the deceased's name off the account, the bank will want to have a Certified Copy of the Death Certificate. A Certified Copy will also be necessary for any accounts that are left "In Trust For" someone. (I.T.F.). Your bank can advise you regarding IRA's or CD's (Certificates of Deposit). Both will need a Certified Copy of the Death Certificate before they are released.

    If the safety deposit box is in the sole ownership of the deceased. Banks will require a Certified Copy of the Death Certificate and Letters of Administration to gain access to the contents. On co-owned safety deposit boxes, the rules vary from state to state. Call your attorney or bank for their requirements.
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