Probate an Estate: How Does It Work?

July 5th, 2016

While deciding to probate an estate is the last thing on the mind of someone who just lost a loved one, it nonetheless needs to be done in order to settle the estate and pass on the property and title to deserving beneficiaries. How it works is that someone close to the deceased individual or their personal representative gets appointed as the executor, and is then in charge of estate settlement as per the individual’s will or trust.

Here’s a detailed guide to how the estate probate process is typically conducted:

  • Account of Inventory

    Probating an estate requires a court hearing, where under the supervision of a judge, the will or trust of the deceased as well as other mandatory estate planning documents are provided by the executor and the chosen estate attorney. Typical documents includes total assets, bank statements, insurance policies, etc.The executor must gather all the necessary documentation at this stage, to prove the total value of the estate, whether property held by the deceased has been passed on to their chosen beneficiaries, and in what manner this has been done. Of course before any steps are taken to passing on the estate, payments are made to any creditors.

  • Open the Probate Estate

    Once the executor has gathered the necessary documentation, he/she has to then (with the help of an estate attorney) appeal for a court hearing, in order to open the estate probate with a court probate. Before the hearing, all documentation must be signed by the executor, after a thorough review alongside an estate lawyer, in order to establish the value of the deceased individual’s assets upon their death.

  • Value the Deceased’s Assets

    On the demise of an individual, most states require the executor of the will or trust to ensure that all assets are up-to-date in terms of their death values, and filed in probate court within 30 to 90 days of opening the probate estate. The executor must get all assets (from real estate to jewelry, retirement accounts, everything) appraised in due time so they have the death values of the estate ready to be presented in court.

  • Pay Final Bills and Estate Expense

    Even for those who have passed on, the expenses are not over. There are the administrative costs and legal fees of conducting estate probate, final bills, mortgage payments, insurance premiums and various other estate planning expenses that need to be cleared.Paying these off is the first thing that needs to be done once the death values of the deceased’s assets are established. The executor can also take a decision in regards with how much the final expenses total up to, and whether any assets from the estate will need to be sold in order to clear the amount due.

  • Pay Taxes

    After clearing all the final amounts payable, expected, or due, the executor then needs to finalize and file all the federal estate tax returns as well as state estate income tax returns. It is then time to clear the amount of taxes due on behalf of the deceased, whether these are income or death taxes.Only after all the income tax and estate tax is cleared can the estate be further distributed to the chosen beneficiaries as divulged in the will or trust of the deceased individual.
  • Distribute and Terminate

    Estate settlement can only happen once all the dues in terms of expenses, debt and taxes are cleared by the executor appointed by the deceased before his/her death. If for some reason the executor fails to pay off every single final bill, administrative expense, or tax debt of the deceased, and distributes the estate, these costs will later have to be cleared from their own pocket if and when they come up.

An experienced financial advisor like Blossom Wealth Management can help you provision for debt and taxes as well as distribution of assets, making the process smoother. Timely planning will also allow you (as the executor of an estate) to set aside enough assets to cover expenses and provide for beneficiaries’ needs, if the administration of the estate is likely to take longer than a year.

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