If you’re involved in settling an estate, one of the first questions you ask is probably, “What is probate?” Probate is the legal process that takes place after someone dies that determines how the deceased’s assets will be distributed. In most circumstances, the executor named in the will assumes the role of handling probate. If there’s no will, the state probate court will decide the rules of inheritance.
Keep in mind that the probate process and timeline will vary depending on the state but, in general, probate law requires these steps.
Step 1: File A Petition To Begin Probate.
You’ll have to file a request in the county where the deceased person lived at the time of their death. The paperwork will ask for you to be officially acknowledged as the legal executor representing the estate. In addition to the petition, you’ll need to file a valid will, if one exists, and the death certificate. Then the court will schedule a hearing to approve the executor (or hear objections from other parties). If you’re approved as executor, the court will officially open the probate case and you will now be able to act on behalf of the deceased’s estate.
Step 2: Give Notice.
You’ll need to mail a notice that the estate is in probate to all creditors, beneficiaries and heirs (as required by the court). Some states may also require you to publish a notice in the newspaper.
Step 3: Inventory Assets.
Collect, inventory and appraise all assets that are subject to probate and present them to the court, such as:
• Bank accounts.
• Retirement accounts.
• Stocks and bonds.
• Real estate.
• Personal effects, such as valuable art collections.
Step 4: Handle Bills And Debts.
Collect money owed to the estate, such as outstanding paychecks and rents. Also review any outstanding bills and debts and decide whether/how they must be paid. This may require some sleuthing on your part. You might need to go through checkbooks, emails and/or bank account to gather information. You’ll need to ensure the estate’s assets can cover all debts before paying them. If not, the state will prioritize creditor claims. You’ll also need to pay all applicable taxes, as well as file a final income tax return on the estate. It’s usually a good idea to set up an estate account for paying the estate’s final bills and expenses.
Step 5: Distribute Remaining Assets.
With all claims, debts and expenses paid, you’ll give the remaining property to the rightful heirs and/or as the will directs.
Step 6: Close The Estate.
Once everything has been distributed, you’ll submit receipts and records of everything to the court and then ask for the estate to be closed – and to be released from the role of executor.
What Is Estate Administration?
Estate administration is the act of representing, inventorying, managing and disbursing a person’s estate after they have died. This responsibility ultimately falls to whoever was named as executor or personal representative in the decedent’s will. Matters can be a bit more complicated when someone passes away without a will (a condition called intestacy), because it may not be clear who should handle the probate and estate administration processes.
How Does Probate Work?
The following steps offer a general guideline of what transpires during probate proceedings and estate administration, but the exact rules and details may differ from state to state.
File as an Executor
To be appointed executor or personal representative of an estate, file a petition at the probate court in the county where your loved one was living before they died. If they died without a will (intestate), eligible heirs must petition to be appointed “administrator” of the estate and the court will determine who will serve in this role. Typically, a surviving spouse is first in line, then adult children, parents, and so on. The person approved to administer the estate will receive legal documents (usually called “letters”) certifying their authority. The original will (if there is one) and a death certificate will also need to be filed with the court.
Notify Creditors, Beneficiaries and Heirs of Probate
Each state has its own laws governing notification of parties who hold an interest in a person’s estate and the amount of time they have to file a claim against it. This notification may include a published obituary in the local newspaper and/or directly notifying interested parties by mail.
Marshal, or Collect, the Assets
This means that you have to find out everything the deceased owned, create an inventory and file it with the court. It’s generally best to start this task early on and consolidate all the estate funds as much as possible. For simplicity and transparency, bills and bequests should be paid from a single, separate checking account. You can establish one for this purpose or request that the attorney you are working with set one up.
Unfortunately, just because a loved one passes away doesn’t mean their bills stop coming. Tackle these by making a list of all liabilities they have. Some, like utility bills, storage fees to secure belongings and mortgage payments, are considered administrative expenses. These accounts must be kept current throughout the probate process. If you use any of your own money to pay these expenses, be sure to keep meticulous records.
You may be able to use estate assets for reimbursement in some cases. Other liabilities like medical bills and taxes are considered final bills. These can only be paid once probate has concluded, and there is a particular order in which creditors are entitled to repayment.
File Tax Returns
You must also file a final individual income tax return for the deceased person by tax day of the year following their death. If the estate earns income (through interest or dividends, for example) during the administration process, it will have to obtain its own tax identification number in order to keep track of the earnings and possible tax consequences. Most estates do not need to file federal estate tax returns, but if one is needed, it must be filed and paid within nine months of the date of death. If you miss this deadline and the estate is taxable, severe penalties and interest may apply. If you do not have all the necessary information available in time, you can request a six-month extension, but you’ll still need to pay your best estimate of the tax by the nine-month due date. If you are unsure what federal or state tax consequences the estate will incur, it is wise to consult an accountant or attorney who is familiar with tax laws. Keep in mind that there may also be state tax requirements for the deceased individual and/or their estate that must be met.
Distribute Property to Creditors, Heirs and Legatees
Generally, executors do not pay out all the estate assets until the period runs out for creditors to make claims, which can be as long as a year after the date of death. However, once you understand the estate and have processed and paid any debts and taxes, you can distribute most of the assets, retaining a reserve for unanticipated claims and the costs of closing out the estate.
File a Final Account
The executor or administrator must file a detailed account with the probate court listing all tax filings and payments, payments to creditors, and distributions of property and assets. Once the court approves this final account, you can distribute remaining funds in the closing reserve and finish your work. Some of these steps can be eliminated through careful estate planning, but an executor or administrator still has to settle all debts, file tax returns and distribute property to the rightful heirs. Meticulous record-keeping and sound legal advice can make this process much easier and shorter for surviving family members and can even reduce legal bills over the long term. It’s not an easy conversation to have, but addressing these matters in advance is beneficial to everyone in the family.
Tips for Personal Representatives
Secure Tangible Property Early On
This means anything you can touch, such as silverware, dishes, furniture and artwork. Once probate formally begins, you will need to determine accurate values of each piece of property, which may require appraisals, so they can be distributed properly. If property is passed around to or taken by family members before you have the opportunity to take an inventory, this will become a difficult, if not impossible, task. To avoid problems, hold off on all distributions and secure property as soon as you can after a loved one’s passing, even if you do not begin probate or the inventory process immediately. Of course, this does not apply to gifts your loved one may have made while they were alive, which are not considered part of their estate.
Take Your Time
You do not need to take any other steps immediately. It’s important that you and your family have time to grieve. Most financial matters can wait, with one exception: Social Security should be notified within a month of death. If SS checks are issued following death, you will need to return them. Filing the will for probate soon after death will help prevent drawing out the entire process. Some states require that a will be filed with the probate court within 30 days of death. Take the time to grieve, but don’t risk additional stress and costs with a lengthy delay.
Consult an Attorney
When you’re ready, meet with an attorney to review the steps necessary to administer the estate. Bring as much information as possible about your loved one’s assets, taxes and debts. Don’t worry about putting the papers in order first; the lawyer will have experience in organizing and understanding confusing financial statements. Many families strive to avoid the probate process, but trying to navigate things on your own can become tricky very quickly and have serious implications down the road. A short consultation can determine whether probate is necessary, assess if there may be any problems or contentions, and offer priceless peace of mind.
Disposition of House
What exactly will happen to the deceased homeowner’s property depends on many factors. In probate, the executor must pay estate debts before he distributes assets. If the house is heavily mortgaged, or if the estate has no other assets and many debts, the executor may have to sell it to pay off debts. If there are enough liquid assets (e.g., bank accounts) to pay the debts, the house would likely pass to whomever the deceased listed as the beneficiary in her will. However, if the house was purchased during marriage, a surviving spouse may claim an interest in it in some states. If the deceased did not leave a will, it goes to the closest family members under the state’s inheritance laws.
Stages Of Probate
There are four basic stages of probate. Each step in the process is detailed in the sections below.
Stage One — Petition and Notices
Probate begins when a petition to open probate is filed with the Superior Court in the county where the deceased person resided. Once the petition has been received, the court will set a hearing date. All interested persons (the personal representative, heirs, beneficiaries named in the will, and creditors) will receive notice of the date and time of the hearing.
Stage Two — The First Hearing
At the first hearing, the court will appoint the estate’s personal representative, unless their appointment is contested. If the deceased person left a will that identified a specific person as their executor, the court must approve and finalize the appointment. If the court does not approve or if the individual does not want to serve as the executor, the court may need to appoint someone else. Once a personal representative is accepted, the court will issue Letters Testamentary, which is a legal document that allows the executor to access estate assets and otherwise administer the estate.
Stage Three — Estate Administration
After the personal representative receives Letters Testamentary, they are responsible for collecting all of the deceased personal assets that are subject to probate. The executor will then be required to submit an inventory of the estate property to the court. Once the assets have been inventoried, the personal representative must provide notice of the death to all of the deceased’s creditors. Creditors with outstanding debts can submit claims and receive payment from the inventoried assets. Under Utah law, creditors must submit claims within four months of the executor’s appointment. The personal representative must also ensure that state and federal estate taxes are paid before distributing any assets to heirs.
Stage Four — Final Distribution
After the personal representative has completed all of their responsibilities, they will file a Petition for Final Distribution with the court, which will require a later hearing to be held. At this hearing, the personal representative will provide a detailed accounting regarding the use of estate assets. The judge will review this information to ensure all of the legal requirements were met. Once the judge determines that the estate has been appropriately administered, they will sign the Petition for Final Distribution and close the estate.
Free Initial Consultation with Lawyer
It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
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West Jordan, Utah
84088 United States
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