Probate Inheritance Assets for Beneficiaries will be Taxed Nine Months from Recorded Death.
Probate inheritance includes all assets owned by a person who has died. Assets can include real estate holdings, life insurance policies, financial portfolios, automobiles, recreational vehicles, jewelry, household belongings and other valuables.
Probate inheritance is held in probate court to ensure directives outlined in the decedent's Last Will and Testament are followed. Additionally, all outstanding debts must be paid prior to distributing probate inheritance assets to entitled heirs.
In the event of the decedent dying intestate (without a Will), a probate judge will designate a Probate Executor to administer the estate. Generally, this is a family member. However, if no one steps up to oversee the estate, the judge will designate an outsider to handle matters associated with the estate.
During probate, all assets must be inventoried and appraised to determine their value. The decedent's bank accounts and financial assets are frozen until a separate account is opened under the estate administrator's name. This allows the administrator to pay bills including utilities, mortgage, credit cards or outstanding loans.
If the estate does not have enough money to pay these expenses, the beneficiaries may have to pay expenses out of pocket. For obvious reasons, this can place a heavy financial burden on the family. Oftentimes, family members are unable to take on additional expenses and are forced to liquidate assets during probate.
In instances where the decedent owns real estate or financial investments, the estate executor can request permission from the court to sell assets. If more than one beneficiary is entitled to assets, all beneficiaries must agree to the sale. If heirs do not agree to the sale, a probate attorney can request the court appoint a Trustee to manage the assets.
When all beneficiaries agree to the sale, they must grant permission to the administrator by signing legal documents. Once permission is granted, assets can be sold with the assistance of the appointed Trustee or beneficiaries can sell the assets on their own.
Probate inheritance assets can be liquidated by selling to private investors or advance inheritance companies. As a general rule, assets are sold to investors and advance inheritance companies under market value. Beneficiaries assign their rights to the assets over to the investor. When probate settles, the investor is reimbursed through the estate.
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Published on September 24, 2008 at 04:25 AM