Probate Estate: How the Probate Court Watches Every Move.
Probate estate refers to assets and personal items belonging to a person who is deceased. Unless a person has executed a living trust, everything they own is transferred to probate. The exception to this rule is when transfer-on-death or payable-on-death beneficiaries are designated. TOD and POD transfers can be assigned to bank accounts, life insurance policies, individual retirement plans, automobiles, motor crafts, and other types of transferrable property.
Probate estate assets are overseen by an estate administrator. The Administrator is responsible for numerous duties including inventorying property, contacting creditors, paying outstanding debts, filing a final tax return and distribution of assets to heirs. Estate executors may have to mediate family disputes or appear in front of a judge if the decedent's Will is contested.
Administrators of probate estates are usually appointed through the decedent's Last Will and Testament. If the decedent died intestate (without a Will), a spouse or direct lineage relative is usually appointed through the court. If no one accepts the position, the court will designate an outsider to oversee the estate.
Most estate executors retain the services of a probate lawyer to assist them with the probate process. Lawyers are allowed to charge a flat fee, hourly rate or percentage of the estate. Much depends on the simplicity or complexity of the estate.
If all heirs are in agreement and estate planning documents are valid, probate can be completed within six months. If there is family discord or any heirs contest the Will, the probate estate can potentially be tied up for years.
In order to close probate estates, the Administrator must pay all outstanding debts, creditor liens and taxes; file a final state and federal tax returns; and distribute assets. Probate laws vary from state to state. Several states require a formal petition be filed in court to provide evidence everything has been paid and all assets properly distributed.
When decedents reside in a state which does not require court proceedings, estate executors should require beneficiaries to sign-off on the transaction. This document should be prepared by a probate attorney. It should acknowledge the heirs are satisfied with the actions of the Administrator and have received their inheritance.
Handing a probate estate can be a time-consuming task. Administrators are entitled to receive a fee for their service. Oftentimes, compensation is outlined in the Will. If not, fees will be paid according to state probate laws.
We encourage you to learn more about probate, estate planning, inheritance, heirs and beneficiaries in our realestate article database. If you have real estate or inheritance held up in probate and need to sell it, contact Simon Volkov to determine what options are available.