When a person passes away, their estate must be legally transferred to their beneficiaries. This is typically done through the probate process – an administrative procedure overseen by a court of law with its own set of rules and regulations depending on the state. Debts are also paid out during this process as any power attorney granted prior can no longer act in place of them post-death.
Commencing the Process
Determining the estate settlement process for a deceased individual begins with an essential question: did they leave behind a will? If no will is found, it may be worth exploring other avenues. For example, check if any attorneys were used to create one and inquire about access to their safe deposit box if necessary; however, state-specific rules could affect this type of request.
When a person passes away without creating an estate plan like a will or trust, their assets are handled in accordance with the rules of intestate succession. This simply means that the court follows certain guidelines to ensure all parties involved receive what is due from the deceased’s estate according to applicable state law.
Initiate the Probate Process with the Court
Taking the will to probate court is a straightforward process, whereupon an individual named as executor in the will can be appointed. Following this brief hearing the executor receives “letters testamentary,” granting them legal authority and power to act on behalf of their estate.
Surviving spouses are often the first choice to be appointed as estate administrator when there is no will, but other family members such as adult children, parents or siblings may also qualify. In exceptional cases where none of those parties are available or willing to oversee the administration process, a deceased’s creditor could potentially take on this responsibility – although they would only do so in absence of any other viable option.
Catalogue the Deceased’s Assets and Documents
Appointees must embark on a comprehensive investigative mission to unearth the assets of the decedent. This could range from reviewing bank statements, locating investment and brokerage accounts, uncovering life insurance policies or corporate records to inspecting artwork adorning the walls of his home. Ultimately each asset should be identified in order for them to reach their final destination according to his/her wishes.
As executor, it’s the individual’s duty to preserve and protect all of the decedent’s assets. This includes taking possession of vital paperwork like income tax returns for up to three years prior as well as physical items such as a valuable piece of art. By securing these objects through careful handling or freezing accounts at financial institutions upon notification that their owner has passed away, an executor can effectively secure any potential losses and always have them accessible when needed during probate proceedings.
Appraise the Value of the Deceased’s Assets
Estate settlement involves the vital task of establishing values for assets as if they were sold on the date of a decedent’s death. While cash and other financial accounts can be easily calculated, items such as real estate, jewelry, artworks and collectibles may require expert appraisals to determine their true worth.
To accurately determine the taxation of a decedent’s estate, it is necessary to value all non-probate assets. These include provisions like retirement accounts with named beneficiaries and real estate jointly owned by two individuals. Generally speaking, only large estates exceeding $11.2 million are subject to federal taxes; state thresholds tend to be much lower in comparison.GOT QUESTIONS… JUST CLICK HERE!
Settle the Deceased’s Income Taxes and Estate Taxes
In order to ensure that all necessary expenses are taken care of, it is critical for you to review the estate settlement process and pay any relevant income or estates taxes. This includes filing all required federal/state personal and estate tax returns so that everything remains in compliance with legislative regulations.
Settle the Deceased’s Last Bills and Estate Expenses
The executor or administrator is tasked with the important job of settling any debts owed by the decedent at time of death. This may include utilities, insurance premiums, mortgage payments and other expenses related to administering the estate such as legal fees or accounting fees. In addition, notices must be publicly posted in order for creditors not already known to come forward and collect what they are due; however if it can be proven that a debt isn’t legitimate then an executor has authority to decline payment.
Allocate the Remaining Estate Assets to the Beneficiaries
Beneficiaries of an estate may be eager to receive their inheritance; however, it is the final step in settling a deceased person’s estate. The executor must submit detailed financial transactions for review by the probate court before assets can be distributed under terms of will and court approval can close out an estate.
If no will has been established, the decedent’s property is typically passed on to their closest family members based on a predetermined order. Generally speaking, this succession plan puts surviving spouses and children first in line for an inheritance – with other relatives only receiving assets if there are none left over from these groups. Every state has its own specific intestate laws that should be consulted beforehand as one makes plans for future estate distributions.
Probate May Be Unnecessary in Some Cases
Decedents can pass on their estate without probate in certain circumstances. For instance, if everything is held in trust or has surviving beneficiaries that benefit from it directly, a full-blown probate process may not be required. In addition to this scenario, many states have provisions for handling very small estates—those whose value does not exceed the state threshold.