Understanding How the Probate Proceeding Works

A probate proceeding refers to estate settlement procedures. The average length of time required to settle an estate depends on several factors. Probate can be settled quickly when decedents engage in estate planning strategies and execute a last will and testament. Estates of individuals who die without a Will require additional time because extra steps are necessary.

Although the probate proceeding varies, all estates must be settled according to state probate laws. Every estate must have an estate administrator who is either appointed within the decedent’s last Will or confirmed through the court.

Probate executors can be anyone aged 18 or over, as long as they have never been convicted of a felony. It is best to designate an estate administrator who is good with finances and able to make important decisions while working under pressure.

Estate administrators are responsible for a wide range of duties. The first duty involves opening a case by submitting the last Will to probate court. When a person dies without a Will in place, the estate executor submits the decedent’s death certificate. Some states prohibit individuals from performing estate management duties until confirmed through the court. Those who are unsure of the process should seek counsel from a lawyer.

The second phase of probate proceedings involves confirmation of the estate administrator. Many states require Administrator’s to be bonded since they act as the estate fiduciary. Some states require estate executor’s to obtain court approval for all estate-related transactions, while others allow estate management to proceed without court interference.

Probate administrators often require assistance from a lawyer, but should strive to do the bulk of the work on their own to minimize expenses. However, when family disputes arise or if heirs contest the Will it is best to hire a lawyer to manage the estate. Oftentimes, probate attorneys can negotiate with disgruntled heirs to avoid the lengthy and expensive process of contesting a last Will.

Estate executors must open a bank account on behalf of the estate to document all income and expenses. Banks sometimes use the decedent’s current bank account, while others require the opening of a new account. Funds are usually frozen until the estate administrator provides Letters Testamentary which grant authority to manage the estate.

The third phase of probate involves securing property owned by the decedent. This can include real estate, automobiles, business assets, and personal belongings. Oftentimes, estate administrators are required to obtain property appraisals to determine the value of inheritance assets. When real estate is involved, Administrators must maintain mortgage payments, property taxes and insurance to ensure the property does not fall into foreclosure.

The fourth phase of probate proceedings involves contacting creditors. In some instances, the surviving spouse assumes the decedent’s debt. This is common when decedents own real estate or have secured loans for a business that transfers to the spouse. If no spouse exists, or if the spouse does not want to assume debts, the estate administrator is required to pay debts through the estate.

If the estate is incapable of paying off debts, the probate executor can attempt to reduce the outstanding balance or hire a lawyer to engage in debt settlement strategies. In some instances, the probate judge will order assets sold to pay creditor debts. This is common when decedents own real estate with a mortgage note.

The Internal Revenue Service requires estate administrators to file a final tax return on behalf of the decedent within nine months from the date of death. It is recommended to use the services of a tax accountant to prepare estate tax returns. If taxes are owed, the estate is responsible for remitting full payment with the return.

Distribution of inheritance property occurs after all debts and taxes are paid. Beneficiaries are required to sign a statement acknowledging receipt of gifts. Statements are presented to the judge, along with estate settlement documents. Once the probate judge approves documents, the estate is considered settled and estate administrators are relieved of duties.

Simon Volkov is a California real estate investor and probate liquidator. His website includes an all-inclusive article library focused on helping visitors understand requirements of the probate proceeding, along with strategies to avoid probate. Learn more about estate planning and how to protect inheritance assets by visiting www.SimonVolkov.com.

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