The Probate Process: What to Do Following a Death
Manage an estate with a minimum of anguish
The emotional trauma brought on by the death of a close family member often is accompanied by bewilderment about the financial and legal steps the survivors must take. The spouse who passed away may have handled all of the couple’s finances. Or perhaps a child must begin taking care of administering an estate about which he or she knows little. And this task may come on top of commitments to family and work that can’t be set aside. Finally, the estate itself may be in disarray or scattered among many accounts, which is not unusual with a generation that saw banks collapse during the Depression. Read More
Here we set out the steps the surviving family members should take. These responsibilities ultimately fall on whoever was appointed executor or personal representative in the deceased family member’s will. Matters can be a bit more complicated in the absence of a will, because it may not be clear who has the responsibility of carrying out these steps.
First, secure the tangible property. This means anything you can touch, such as silverware, dishes, furniture, or artwork. You will need to determine accurate values of each piece of property, which may require appraisals. Later, you will distribute the property as the deceased directed.
If property is passed around to family members before you have the opportunity to take an inventory, this will become a difficult, if not impossible, task. Of course, this does not apply to gifts the deceased may have made during life, which will not be part of his or her estate.
Second, take your time. You do not need to take any other steps immediately. While bills do need to be paid, they can wait a month or two without adverse repercussions.
Before you do anything else, secure the tangible property.
It’s more important that you and your family have time to grieve. Financial matters can wait. When you’re ready, but not a day sooner, meet with an attorney to review the steps necessary to administer the deceased’s estate. Bring as much information as possible about finances, taxes and debts. Don’t worry about putting the papers in order first; the lawyer will have experience in organizing and understanding confusing financial statements. Read More
The probate process
Probate is the process by which a deceased person’s property (the “estate”) is passed to his or her heirs and legatees (people named in the will). Strictly speaking, “probate” only includes property owned by the deceased in his or her individual name, not joint property, living trusts, life insurance or retirement accounts that pass automatically at death. But the term is often used to encompass the entire estate, including both probate and non-probate property. While the legal process, supervised by the probate court, usually takes about a year, substantial distributions from the estate can be made in the interim.
The exact rules of estate administration differ from state to state. In general, they include the following steps:
1. Filing the will and petition at the probate court in order to be appointed executor or personal representative. In the absence of a will, next of kin must petition the court to be appointed “administrator” of the estate.
In many states in the absence of a will, not only family but any “interested party,” including creditors, may be appointed.
2. “Marshaling,” or collecting, the assets. This means that you have to find out everything the deceased owned. You need to file a list, known as an “inventory,” with the probate court. It’s generally best to consolidate all the estate funds to the extent possible. Bills and bequests should be paid from a single checking account, either one you establish or one set up by your attorney, so that you can keep track of all expenditures. The account needs to be a new account in the name of the estate, not the continuation of an account previously owned by the decedent.
3. Paying bills and taxes. A federal estate tax return generally must be filed if the estate exceeds the estate tax exemption equivalent applying in the year when the individual died. Many states have lower taxation thresholds. The return must be filed within nine months of the date of death. If you miss this deadline and the estate is taxable, severe penalties and interest may apply. Read More
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