Feeling lost can be a good thing. It means you‘re realizing that you no longer want what you once did. It means that you‘re starting to change the way you think—and we believe that‘s a sign of growth, a revelation to your legacy!
Dig in and enlighten your perspective before jumping off to any mysterious trail. Here you will find our expert reflections on policies and laws that will relieve any doubts and uncertainty.
When a person dies, their assets may need to go through the probate process. Probate is a court proceeding that allows a personal representative, also known as an executor or administrator, to settle the final debts of the decedent and distribute money or assets to the decedent‘s heirs or legatees. If there were assets that were named beneficiaries or joint owners, then those assets typically stay out of probate.
Further, it chunks down to two brackets: testate and intestate.
If a person dies intestate, it means they died without a will. If this happens, many states will require probate to administer the decedent‘s assets. For intestate estates, an administrator has to be appointed by a court. An administrator is similar to an executor, but the difference is that an executor is associated with a will. Oftentimes an administrator may be a spouse, child, parent, or the decedent‘s closest living relative.
When a person dies without a will, the court usually requires a bond on the estate. A bond is very similar to an insurance policy. The purpose of the bond is to provide financial protection for the estate from the administrator. A bond is not refundable and the cost of the bond will be based on the value of the estate.
In probate, there are supervised and unsupervised estates. If an estate is supervised, it requires the administrator to get court permission for each event in the probate process. If an estate is unsupervised, the administrator can take most steps without getting permission from the court.
Each jurisdiction has its own “claims period” in which creditors can file claims against the estate for any debts that the decedent had. Once the claims period has passed and all debts have been paid, the administrator will be able to distribute the probate estate‘s remaining assets by the terms of the inheritance laws of the jurisdiction (often called intestate succession or rules of descent and distribution).
If a person dies testate, it means they died with a will. The executor will locate the original will and should file the will in the county that the decedent was a resident of when they died. Many jurisdictions require the executor to file the original will (not a copy of the original) because there may be a presumption that the decedent revoked the original will if it cannot be located.
When the executor petitions the court to begin the probate process, the executor may still need to get a bond to protect the financial interest of the estate. Each court and jurisdiction has different rules regarding bonds. Sometimes the last will and testament can “waive” or avoid bond, but other times the court may still require it. Some testate estates may also have to be supervised, but this typically happens when there are family disputes about the executor‘s estate.
Once the court approves the executor‘s appointment, the executor will be able to manage claims of the estate that are filed within the creditor claims period. After the claims are paid, the executor will either liquidate the remaining assets or distribute them to the beneficiaries of the will.
The personal representative will generally be reimbursed for out-of-pocket expenses to initiate the probate process. A personal representative should not personally pay any of the decedent‘s debts. If there is not enough money to pay the estate‘s debts, assets may have to be liquidated to satisfy the debts. Debts may be prorated based on the inheritance laws of the state where the decedent lived.
Many states require an attorney to be involved in the probate process if the estate is valued more than a specified amount. You can check the laws of the jurisdiction that the decedent resided in to see whether probate is necessary or contact a lawyer for more assistance.