Why Is the Administration Process Necessary?
When an individual passes on, it is necessary to follow through with a detailed process and adhere to specific protocols to settle the estate they have left behind. One of the most important parts of this process, for example, is retiring their Social Security number to prevent identity theft. It is often beneficial to consult a lawyer who specializes in this field and knows the proper tools to use when transferring assets to beneficiaries. This helps guarantee that the process goes as intended and the costs and taxes are minimized. These attorneys use tools such as rights of survivorship, probate, beneficiary claims, Heggstad petitions, and small estate affidavits to carry out the process.
The main reason for estate administration is to ensure the transfer of a decedent’s assets in an orderly fashion. It doesn’t matter if the individual left a very large estate or a meager one; it is still important to settle things properly. The process must be completed whether there is no will, a written will, or a trust.
To properly administer an estate, an official person must be designated legally to handle all the details involved. Terms that are used to describe this individual include personal representative, fiduciary, and executor. This fiduciary is necessary because there must be an individual who is authorized to sign for the decedent and transfer their assets. When a person dies with a will, this individual is known as an executor. When there is no written will naming an executor, the process is carried out by an appointed personal representative called an administrator. This person handles the responsibilities of locating the decedent’s assets, conducting a thorough inventory of the assets, and having necessary items appraised.
Responsibilities of an Executor of a Will
The first thing an individual must do when they are named as the executor of a will is to file with the county’s probate court where the decedent passed away. The probate court determines if the will is valid and handles any litigation involving challenges to it. Once that is done, the executor must administer the estate based on the terms laid out in the will. They must contact creditors who are owed money and beneficiaries who are to receive assets. One of the most important tasks to keep up with is obtaining receipts and keeping exact records of expenses and items paid from the estate.
When a creditor makes claims against an estate, it falls on the executor to pay off the debts using the assets of the estate. They must have an accurate inventory of the assets, even those not listed in the will. This is important because those assets must also be distributed in accordance with the state’s intestacy laws. Expenses that are owed to attorneys, creditors, accountants, and other entities resulting from the probate process must be paid from the estate’s assets before the remaining amount is distributed to the decedent’s beneficiaries. The difficult task of ensuring that all assets are distributed according to the decedent’s last wishes is the executor’s job.
Each of the following details of settling an estate must be taken care of on an individual level.
Managing Estate Assets
- Access. The fiduciary must gain access and control of all the assets belonging to an estate or trust.
- Tangible items. Individuals often leave valuable personal property such as collectibles, jewelry, automobiles, artwork, and furniture to their estate. If this is the case, a professional appraiser may need to be consulted to determine the items’ value.
- Finances. Accounts such as securities and bank accounts must also be valued when they are part of an estate.