Tag: Estate Administration

Estate Planning

Probate’s Timeline

SchulzeLawGroup

A will must go through probate before it is acknowledged, a personal representative (executor) is named, and assets are distributed according to the will. It also requires paying the decedent’s outstanding debts and federal and state taxes. Each state has different laws determining if probate is necessary or can be expedited, whether the fiduciary requires bonding, and what reports must be prepared. The probate experience is unique, as no two wills are the same.

In general, the timeline of the probate procedure moves quickly if the estate has minimal assets and little debt. Larger estates can expect a process lasting anywhere from nine months to a few years, especially with problematic family dynamics. An estate planning attorney or probate lawyer can help guide efforts in these more complex or contentious circumstances. During a time of grief, it is reassuring to have a general probate timeline to help manage expectations and deadlines as you move through the process.

Prepare and File the Probate Petition (1-4 months)

Filing a probate petition requires a valid will and the decedent’s death certificate, usually provided by the funeral home. The personal representative or executor sends an official notice of probate to beneficiaries or interested parties, with each state having specific requirements regarding the notification process. To speed the process, when there is agreement among beneficiaries, each party signs the “waiver of process consent to probate.” This consent form advises the court there are no issues with the will, and beneficiaries forfeit the right to challenge the will or its executor.

Usually, an executor sends a notice of probate within the first two months of the decedent’s passing. Some states require a notice of death published by the executor in the newspaper. The executor provides the funeral home with the decedent’s Social Security number, and they create a legal death certificate. An executor may prefer to purchase several death certificates for larger estates. It is a responsibility to report the person’s death to the Social Security Administration. If the decedent received medical benefits, a notice of death to the Department of Health and Human Services (HHS) is a requirement.

Provide Notice to Creditors (3-6 months)

Like all beneficiaries, all creditors must be aware of the decedent’s will. The estate’s personal representative notifies appropriate claim holders via a formal notice to creditors and other firms, companies, or people to whom the decedent owed money. It is important to follow court rules for notifying creditors. Discovery regarding the deceased’s outstanding debts is most easily achieved by gathering the remaining bills or requesting a copy of the decedent’s credit report.

Payment of Debts and Fees (6-12 months)

The decedent’s creditors receive notification of the individual’s death with a formal notice of death and notice to creditors. The executor must pay all professional and personal debts from the estate with estate funds. The estate is also responsible for payment of the decedent’s state and federal income taxes before the probate process can conclude.

Additionally, the process of probate itself costs the estate money. All fees and administration costs relating to probate are to be paid by the estate via the personal representative’s actions. The fee structure can increase based on the length of time a will is in probate, so the executor benefits by moving quickly and carefully.

Asset Inventory (6-12 months)

An inventory of the estate’s assets is a crucial part of the will since it becomes part of the official estate record. The task can be time-consuming, particularly if the estate’s records are in disarray. Most asset inventory will include:

  • Bank accounts, including savings and checking accounts
  • Property and real estate
  • Stocks and bonds
  • Retirement accounts
  • Life insurance and annuities
  • Luxury items of significant value, like jewelry, watches, art, and other collectibles
  • Intellectual property, including patents, trademarks, copyrights, software databases, and design rights
  • Online line business ventures that produce income or have stand-alone value

Jointly owned real estate, property, vehicles, and financial accounts transfer to the surviving owner. Probate is also not required for IRAs with a beneficiary or other accounts with a pay-on-death designation.

Asset Distribution (9-18 months)

Before asset distribution, the estate’s executor should make every effort to pay all outstanding debts. When all creditor bills are paid, and the remaining assets are accounted for, some state probate law dictates the distribution of assets occur only after the probate hearing. Concluding the probate hearing first prevents the opportunity for an ungrateful or disgruntled beneficiary to threaten the will’s validity.

The Estate Closing (9-24 months)

Probate can conclude when all creditors are paid, taxes are filed, and assets are sold or distributed. After finalizing the executor’s duties, the probate court judge then issues the final order of discharge of the personal representative. This court action officially closes the estate.

All wills go through probate proceedings; however, it is not the only available option. Larger estate owners may prefer to protect the futures of their loved ones using trusts. There are advantages to avoiding probate as it can be lengthy, complex, expensive, and is always a matter of public record.

Your estate attorney can customize an estate plan for your family situation. Our estate planning firm can advise trusts and other legal mechanisms to lessen the probate process or let you know if your estate is a candidate for an expedited process. There is a general timeline for the probate process, yet, all wills and state laws are different.

We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Estate Planning

Probate with No Will

SchulzeLawGroup

When a loved one dies without making a will, or intestate, a probate court will oversee the distribution of the estate according to your state’s intestacy laws. Also known as intestate succession, it has similarities to the probate process when a will is present. Still, the terms are not interchangeable—any adult who dies intestate triggers a somewhat different process than a will going through probate.

Do You Have a Will?

Many Americans will face the challenges of their loved one dying without a will. According to Think Advisor, a recent survey finds that 59 percent of men and 72 percent of women do not have a will or estate plan. In another survey, CNBC finds a mere 33 percent of Americans have properly established estate plans. Many individuals feel they do not own enough to necessitate writing a will or negatively perceive estate planning as too complex and expensive. They leave their grieving loved ones to accept the court’s decisions regarding their loved one’s inheritable assets and possessions.

Resolving the Estate

The probate court judge’s primary duty is to oversee the lawful resolution of the decedent’s financial affairs. They will follow state law to select a personal representative as the estate administrator. There is technically no executor as no will was left to execute, yet the estate still must be legally resolved. A loved one can begin the intestacy process by going to the decedent’s county probate court, filing a death certificate, and petitioning to begin probate. They will typically nominate themselves as the administrator, but the probate court judge has the authority to name the estate administrator.

Assets Falling Outside of Probate and the Role of Administrator

Like dying with a will, dying intestate does not affect jointly held accounts and those assets with a designated beneficiary or payable-upon-death status. These may include money market, savings and checking accounts, IRAs, retirement accounts, certificates of deposit (CD), life insurance, and annuity policies. The estate administrator, as appointed by the probate court judge, will perform the functions as required by state law, including:

  • Identify and give notice to estate beneficiaries and other interested parties
  • Give notice to creditors
  • Give notice to all government agencies from which the decedent received benefits
  • Pay debts and fees, including state and federal taxes
  • Inventory assets
  • Distribute assets
  • Close the estate

Under the law, family members may inherit the remaining assets after payment of the estate’s final debts through the estate administration process. The handlers of the administration process may be one person, two or more individuals, a bank, or a law firm. In cases of estates under a certain dollar amount, the administrator may petition the probate court for a simplified version of the probate proceeding.

Standard Probate Proceedings

Though some of the filings and processes are different than probate with a will, the probate court is still actively involved if your loved one dies intestate. The probate court processes may:

Resolve or prevent conflicts – A probate court judge will decide how to answer any legal questions that may arise related to state law. When someone dies without a will, family members often claim certain assets or possessions of the decedent, citing a verbal promise. The estate administrator can avoid becoming the lightning rod of controversy for decision-making since the probate judge makes the final decision. Although this is no guarantee heirs won’t fight things out in court, in most cases, intestate succession laws prevent these disputes.

Legally Transfer Title – Real property like a house, car, truck, or boat, without joint tenancy with right of survivorship or held in trust, requires the probate court to transfer the name on the title. In cases of real estate owned by a couple or shared personal property in a community property state, titles may transfer automatically to the surviving spouse.

Cut off claims by creditors – Once the probate court process starts, creditors have a certain amount of time to bring a claim against the estate. Estate administration can reduce this timeframe in some states to as little as three months so that a creditor can’t approach a family member looking for money months or even a year into the future.

Take money from accounts – If the decedent’s financial accounts are not jointly held or do not have named beneficiaries, or payable-on-death status, a family can’t access the funds in the accounts without the probate process and approval.

Probate Laws Vary by State

In cases of dying intestate, the probate process is similar among all states, but state laws still vary. If you are administering an estate without a will, an estate planning attorney or probate lawyer can help you understand the differences in the probate process. Getting professional legal advice can be well worth the money spent to distribute the decedent’s assets according to state law and properly close the estate.

We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Estate Planning

How to Understand Probate

SchulzeLawGroup

You can minimize or avoid probate entirely by working with an estate planning attorney. Probate proceedings are part of the public record and can be very time-consuming and expensive. However, in nearly every case, some probate is necessary, so it is important to understand how to navigate the process.

Probate proceedings seek to validate the decedent’s last will and retitle the estate’s assets into the name of heirs according to the deceased’s wishes. These court-supervised proceedings ensure estate debts are paid and oversee the distribution of assets to heirs. 

After losing a loved one, the family will generally come together and hopefully encounter a properly written will and other crucial estate planning documents. Without a well-organized plan, the probate process can take much longer. Family members will be tasked with gathering information necessary for court.

Probate Court Proceedings

The petitioner, usually the estate executor or personal representative, will begin the process by filing a death certificate and a last will to the probate court. It is also useful to produce a list of know creditors and names and contact data of the decedent’s heirs. Smaller estate probate processes and those estates not contested by heirs can usually work through probate fairly quickly and efficiently.

Laws regarding probate are state-specific, and most states set valuation thresholds. If, for instance, an estate value is less than $75,000 and no one contests the will, less formal probate hearings may move more quickly. Since the advent of COVID-19, these court proceedings may even transact over video calls.

For larger value estates, there is a substantial amount of necessary paperwork to validate the will, determine asset distribution, settle disputes, pay off remaining debts, and ultimately close the estate by paying the decedent’s final taxes. A checklist of documents to gather may include:

  • Death certificates
  • Final will
  • Revocable trust documents
  • Heir and beneficiary contact data
  • Beneficiary designations
  • Pre or post-nuptial agreements
  • Previous three years of federal and state income and gift tax returns
  • Life insurance policies
  • Real estate deeds
  • Vehicle titles
  • Statements of financial accounts
  • Contracts and business agreement documents
  • Appraisals for high-value art, collectibles, or jewelry
  • Other known assets
  • Known debts
  • Ongoing bills
  • Medical and funeral expenses

Probate Proceedings Without a Will

The decedent’s residence states intestacy laws will apply if your loved one dies without a last will (intestate succession). All personal property without a beneficiary designation will be subject to the probate process at the court’s direction.

But some assets will avoid the probate process under state property title, state contract, or state trust law. These assets may include:

  • Beneficiary designate life insurance policies
  • Beneficiary designate retirement funds
  • Beneficiary designate annuities
  • Pay-on-death or transfer-on-death accounts
  • Joint tenancy property with rights of survivorship
  • Tenancy by the entirety
  • All trust property

Cost of Probate

Complex probate processes can be costly and take years to finalize, which is why many individuals retain an estate planning attorney to minimize probate proceedings. Lengthy proceedings can be frustrating for heirs who are rightful beneficiaries but must comply with the probate process. The average cost of probate varies by state; however, five to ten percent of an estate’s value in administrative costs and legal fees is typical. Some estates may lose as much as twenty percent of their value.

Other fees may include executor compensation, court fees for filings and paperwork, and a probate bond. After the probate proceedings are complete, a probate bond may be refunded. The most common reason for high probate costs occurs when beneficiaries contest the will, as ongoing litigation can be expensive. Issues relating to preparing and filing the decedent’s last federal estate tax return and any ensuing audit may also increase the cost of the probate process.

Most individuals will create an estate plan with their lawyer that allows assets to pass outside the probate process, typically through creating a revocable living trust. Depending on your situation, your estate planning attorney may recommend other types of trusts as well as ensure that named beneficiaries on accounts that pass outside of probate are up to date. Regularly reviewing your estate plan with your attorney can help minimize probate court interactions and streamline your heir’s inheritance process. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.