Learn what happens to an estate after the owner dies.
In the wake of a close relation passing away, material things may seem trite. But probate as a legal process can help protect the assets that your loved one left behind.
What is probate?
Probate is the legal process that manages an estate after the owner dies. It involves legitimizing the will and distributing assets.
It protects that person’s belongings and makes sure their wishes are carried out after they’re gone. But it’s known for being tediously slow and can get expensive due to court and lawyer fees.
If there’s a will, you’ll begin by following these steps:
- File the petition. It all starts with some paperwork. A petition must be filed with the probate court to appoint the executor and validate the will. Documents you may need include: a death certificate, the original will and an application from the court clerk. Typically, this is done by the person dictated as executor, or by family.
- Appoint the executor. The court schedules a hearing to officiate the executor and confirm the will. Creditors and beneficiaries are notified and invited to attend. In most cases it’s just a formality, but if someone wanted to contest the appointed executor, this would be their chance.
- Validate the will. As part of the first hearing, the court decides whether or not the will is legitimate. Typically, all that’s needed is a word from its witnesses — a notarized statement, sworn statement, or court testimony.
- Notify creditors. The executor writes to the estate’s creditors to inform them about the death. There’s a limited window of time in which the creditors can make a claim on the deceased’s assets.
- Take inventory. It’s the executor’s job to locate everything the descendant left behind, including stocks, property, bonds and bank accounts. An independent appraiser can be hired to help.
- Pay back debts and taxes. After assets are accounted for, the executor must decide whether or not the creditor’s claims are legitimate. Then, all the bills connected to the estate must be paid. If more cash is needed, items may have to be sold.
The executor must file taxes, accounting for the decedent’s personal income in the last year of their life, and any taxes owed on the estate. The estate’s assets should pay for this.
- Distribute the estate. Finally, the executor petitions the court, asking permission to give beneficiaries what’s theirs, as dictated by the will. Stocks and property are transferred to the appropriate owners and assets are liquidated or doled out. The will has officially been carried out.
How long does the probate process last?
The American Bar Association says six to nine months, on average. However, how long it takes can depend on:
- The clarity of the will regarding the estate
- How complicated the estate is to split up
- How quickly creditors come forward to claim assets
- The pace at which the executor makes decisions
What’s the probate process without a will?
If there’s not a will, authority over the assets goes straight to the courts. From there, the intestate laws of that particular state determines the order the property is passed on to relatives. The court can also appoint an executor to manage debt repayment and asset liquidation.
But since each state sets its own rules, check the laws in the place where the decedent last resided to confirm what will happen.
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The probate process makes sure your assets are managed in an orderly fashion after you’re gone — but it can be time-consuming and expensive. Planning your estate on the front end can help ensure things move smoothly later on, which can include securing life insurance and establishing a private trust.