Probate estate is a term used to describe assets belonging to a person who has died. Probate is the legal process used to determine rightful heirs and establish a value for financial and real estate holdings. Everything the person owned must be transferred to the probate court before distribution to heirs can occur.
The process for transferring probate estate assets typically lasts several months. Much depends on the size and value of the estate. If the decedent established estate planning the estate can pass through probate relatively quickly. However, if the decedent died without executing a last will and testament, the process will take longer
When a person dies intestate (without a will) an estate administrator must be assigned to oversee the estate. Estate executor duties include working with a probate lawyer or estate planning specialist to ensure proper documents are filed with the court.
Executors are also responsible for obtaining appraisals on real estate and valuable assets such as collectibles, art, jewelry or antiques; paying outstanding debts; filing a final tax return on behalf of the decedent; and distribution of assets when probate settles.
When decedents execute a Will, the estate administrator is designated within the document. In most cases, the Administrator is aware of the fact they have been assigned to perform this duty. However, there are instances where the designated executor is unaware of the appointment. If a designated estate administrator is unable or unwilling to perform probate estate duties, they must submit a request to be removed from their duties in writing to the court or probate attorney.
The only way to completely avoid probate is to establish a revocable or irrevocable living trust. Trusts are generally reserved for estates valued over $100,000. However, individuals whose estates are less than $100,000 can keep some of their assets out of probate by establishing transfer-on-death (TOD) or payable-on-death (POD) beneficiaries.
Transfer-on-death beneficiaries can be assigned to financial holdings such as investment and retirement accounts.
Payable-on-death beneficiaries can be assigned to checking and savings accounts.
Individuals who own automobiles, recreational vehicles, motorcycles or boats can assign a second individual to the title. When the person dies, the second named person can take the title to the Bureau of Motor Vehicles, along with a copy of the death certificate, to have the vehicle transferred into their own name.
Most will executors prefer to work with a probate lawyer to ensure all documents are properly filed through the court system. In some instances, probate estate administrators can administer the estate without legal assistance. However, this is rarely advised.
Not all states require court administration of probate estates. Estate planning experts recommend executors who plan to go it alone, make certain they understand the probate laws of the decedent's residence. Additionally, be certain to obtain signed and notarized documentation from all heirs and beneficiaries, outlining the estate assets they received.
Administering a probate estate takes time and effort. Executors should possess the ability to handle multiple tasks, basic accounting knowledge, and mediate with family members should disputes arise.
Estate administrators are entitled to compensation for their work. In most cases, compensation is disclosed within the Will. Otherwise, fees are paid based on state probate laws.
Published on February 19, 2009 at 03:58 AM