The Reason for the Administration Process
When an individual passes away, a multi-faceted process must be adhered to and completed to settle their estate. For instance, the individual’s Social Security number must be retired. Failure to do so is the greatest means by which identity theft occurs. Consulting a legal professional who fully understands the process and the tools necessary to transfer assets to the decedent’s beneficiaries successfully helps ensure that everything goes smoothly and resulting expenses and taxes are kept to a minimum. Some of the tools these professionals utilize include probate, rights of survivorship, Heggstad petitions, beneficiary claims, and small estate affidavits.
The primary reason for administering an estate is to guarantee the orderly transfer of an individual’s assets when they pass away. This is true in any situation, whether it involves an extravagant estate or one that is very humble. This process is necessary whether there is a trust, a written will, or no estate planning documents at all.
When an estate is being administered, it is necessary to have a designated individual legally handle the estate’s details. This individual is known as an executor, a fiduciary, or a personal representative of the decedent. The executor is necessary because someone must be officially authorized to transfer assets and sign the decedent’s name. When there is a will (testate), the personal representative is called the executor of the will. If no written will exists (intestate), an administrator is appointed to see the process through. This personal representative is responsible for conducting an inventory of the decedent’s assets, locating and gathering said assets, and getting them appraised.
The Probate Process When a Will Exists
When an executor is named in a will, the first responsibility that they must handle is filing with the probate court that has jurisdiction in the place where the individual died. The court will determine whether the will is valid and settle any challenges that are raised through litigation. At this point, the executor is tasked with administering the estate according to the terms stated in the will. They must reach out to creditors and beneficiaries before any assets are distributed. The executor needs to obtain receipts and keep detailed records throughout this process to keep track of expenses and other items paid from the estate.
If there are claims made against the estate by a creditor, the executor must use the estate assets to pay off these debts. Taking an inventory of all the decedent’s assets, including those not listed in the will, is essential, as they must distribute those assets according to the state’s intestacy laws. Creditors, attorneys, accountants, and other costs that result from the probate process must be paid out of the assets of the estate, and the remaining amount distributed to the beneficiaries. The executor has the sometimes complicated task of distributing all a decedent’s assets according to their last wishes.
Settling an estate involves taking care of many specific details on an individual level, including the following:
Estate Asset Management
- Gaining control. A fiduciary must gain access to all the assets that make up a trust or estate.
- Personal property. Often, a decedent will leave tangible property such as automobiles, furniture, jewelry, artwork, and collectibles as part of their estate. In these circumstances, the fiduciary may need the help of a professional appraiser to determine their value.
- Financial assets. Items such as bank accounts and securities that are part of an estate must also be valued.