Probate can be a long and complicated legal process, but it doesn’t have to be – especially if you have a decent grasp of what to expect. Dealing with a loved one’s estate is never fun, but you can control your expectations by understanding the probate process. Basically there are nine steps to the probate process. While some can be done concurrently there are time frames on others.
Hire A Probate Attorney
Begin by meeting with a probate lawyer who can help you collect needed documents The two most important are the deceased’s will and death certificate. The attorney can help you be assigned as the Personal Representative (PR) if you are named as such in the will. This gives you the authority to conduct the remaining steps.
File a Petition with the Probate Court
The process begins in earnest when you file for the Petition for Administration, the will and the death certificate with the probate court in the county where the deceased last had a residence. At the same time, those named in the will and all potential heirs are formally notified that the probate process started.
About a month may pass before the court will issue Letters of Administration, indicating that the petition has been granted. The Letters of Administration will also designate the Personal Representative, allowing them access to the deceased’s assets and to proceed with estate administration – the first act of which may be to open an estate account that serves as a depository for all estate assets subject to probate.
Notify the Deceased’s Creditors
The PR must attempt to notify the deceased’s creditors by publishing a general Notice to Creditors in a newspaper local to the deceased’s residence at least once per week for two consecutive weeks.
Creditors typically have 90 days from the date the notice is published to file claims against the estate. Throughout this 90 days, the PR must make a list of all known creditors, what they are owed and file this with the court.
Inventory the Deceased’s Estate
The total net worth of the deceased’s estate must be assessed. The PR can do this during the 90 Notice To Creditors period so the assets and the debts are clear and the estate can be moved forward at the end of the 90 days. The PR must conduct an inventory and valuation of the deceased’s property. This includes bank accounts, mutual funds, stocks, bonds, real estate titles, vehicle titles, and other countable assets – sometimes including an inventory of property inside of the deceased’s residence. Once completed this can be filed with the court.
Pay Valid Debts
Once three months expire since the creditors were notified, the PR will begin paying all valid debts. Any claims received after this point are not considered valid and can be successfully disputed.
Debts must be paid by first using the cash available in the deceased’s estate account. If there isn’t enough cash, the PR must sell off other estate property to generate more cash to satisfy the creditors. Personal property should be sold first and then if needed the real estate.
File & Pay Estate Taxes
A final income tax return that includes the estate tax and all other applicable taxes must be filed and paid to the IRS. This is another step that can be started during the 90 Notice To Creditors period. This is a highly important because the PR, as a fiduciary, could incur personal liability for any penalties or unpaid taxes associated with the deceased’s estate. It is vital to have someone like a CPA to walk you through this stage of the process.
Final Estate Accounting
At this point the PR will need to organize all the records for the asset valuations, the creditors paid, professional fees paid and the tax returns. The PR is also entitled toa fee. If the PR takes such fee it must be disclosed as well.
Distribute Remaining Assets to Beneficiaries
Finally, the people named in the deceased’s will can receive their inheritances in accordance with the deceased’s instructions. A plan for how this distribution will ultimately take place must be agreed upon by all applicable parties.
Close the Estate
Once everything has been distributed the PR has one more task. The PR must file a petition to discharge the PR from his or her fiduciary position and close the estate. At this point, the probate process is ended. Congratulations! You made it through the crying creditors, and the nagging heirs in one piece.