Have you lost a loved one recently? Truthfully, coping with grief is never easy. Some people take a few days to recover, whereas others can’t get over their loss even after months.
But sadly, the world doesn’t stop for anyone. That means an entire probate process will demand your attention and time right after the funeral.
Probate is a legal process by which the will gets distributed among heirs. The process also covers paying the deceased person’s debts and settling assets, if any. Unfortunately, this entire procedure is hard to grasp for someone grieving the loss of their loved one, but there is no way to escape. You can only learn a thing or two to make this easier. First, understand the difference between formal and informal probate. Small estates and assets have an informal probate that doesn’t involve legal technicalities, whereas formal involves massive estates.
Next, the court carries out all wishes of the deceased and ensures the fulfillment of an obligation. The direct involvement of the jury and judge makes the process lengthy, but a supervisory role is mandatory. Now, how does the probate process start? Here we have highlighted a few simple steps to proceed with the probate.
1. File a Petition
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The first step with any estate is filing a petition in court; for this, you must bring a probate attorney on board. After all, managing things all by yourself in this crucial time might be impossible and mentally exhausting. They would submit a copy of the death certificate and a will to file a petition.
After reviewing the petition, the court will open the probate, and an executor will get appointed. An executor could be anyone who will represent the deceased, meaning it could be your attorney. If no one is willing to act as an executor, the court will appoint someone of their choice. It could be one of the beneficiaries, an accountant, or one of the heirs.
2. Value the Estate
As the court takes a few weeks to review the petition, utilize that time to value the estate. It would require you to review the deceased person’s papers and accounts. In addition, you must ask about the deceased’s investments and properties to establish the assets’ accurate and fair value. Remember to carry the death certificate and copy of the will to prove the entitlement; only then will you get information from financial institutes.
Further, inquire about the deceased liabilities and debts since these will also need settling. You can use the money collected from assets to repay these debts.
3. Issue Bond
The next step in the probate process will involve getting a bond. This bond will protect the heirs from any claims made against them or in case of any fraudulent activities. Perhaps, someone might appear in court, claiming to be one of the heirs of the deceased. An issued bond will close doors for such incidents since it is a surety that the estate will take care of the matter. Hence, the bond will compensate for any mistake that costs money to heirs.
After bond issuance, your attorney will receive documents called Letter of Administration and Testamentary. These documents will allow the lawyer to act as the estate’s manager. Anyone can volunteer to receive these rights but remember, it comes with lots of responsibility. The estate manager would pay bills, sell assets, and do the executor’s tasks.
4. Give Notice to Creditors
Once you have an executor or an attorney on board, remember to give notice to creditors. The entire process of providing notice varies from state to state, but you must state your earliest possible. Some people prefer publishing a statement in the local newspaper so that everyone gets to know it. Otherwise, you can also send letters to the known creditors. It allows the creditors to give a specific timeframe to submit the dues on behalf of the deceased. Most creditors give a time frame of 3-4 months, but this time can also vary by state.
5. Inventory Assets
As you wait to hear back from the creditors, start inventorying the assets. Small estates take a couple of days, but large estates can take several months. When creditors return, you must liquidate at least 50% of the assets to repay them quickly. Request your attorney to track all assets and get ownership proof. They will secure all assets while ensuring none is lost or sold during this time. Similarly, if the deceased owned any business, start the process for liquidation by taking out all available cash. Remember, this process takes time; hence, begin as soon as possible.
6. Pay Debts & Taxes
Besides paying creditors, you must pay all the pending tasks. For that, consider opening a bank account in the estate’s name, submit all proceeds in this account, and use it to pay off debts. As these probate cases don’t settle until several months, provide a court list of the deceased person’s property to keep the account open.
Moreover, your attorney will also have to file returns and pay taxes timely. First, check the federal and state income tax returns. You must also check the previous year’s income tax returns if the deceased died before filing them. After all, it can lead to complications for the family. Second, file a state inheritance tax return but ensure it is applicable in your state. It might seem like a lot of work, but your lawyer will handle everything on your behalf.
7. Close the Estate
Once everything is done – from taxes, and creditors’ payments to debts, distribute the remaining assets to the beneficiaries. It would allow you to close the estate while releasing the lawyer from their executor duties. Submit a request to complete the estate with the court. In addition, give an accounting for all your activities that shows where all assets are going. It should also reflect that all payments have been made to the creditors.
Final Thoughts
Even though your loved one has made a will and allocated all assets, completing the probate process is mandatory. And it is best if you have an attorney on board who would oversee all documentation requirements and property work. They will also look after creditors, debts, and tax filing, giving you peace of mind. You will only have to oversee the entire process and help the lawyer close the estate with the proper distribution of the remaining assets.
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