How Is an Estate Settled During Probate?

If you are named as the executor of an estate, there are specific things that must be done after the passing of the decedent during the administration process. This would also apply to a family member that has to sort out an uncertain situation after the death of a relative.

In this post, we will provide a basic overview of the steps you would take if you are in this position.

Ground Zero

Assuming you are an executor, at the beginning of the process, you start to assemble the documents that you will need to go forward. Obviously, the will itself will be the most important one, and should know exactly where to find it if you have discussed things with the decedent.

Open the Estate With the Court

The first order of business is to formally open the estate with the probate court. You present the will, and the court will typically hold a brief hearing during which you will be empowered to administer the estate.

If there is no will at all, someone representing the decedent would apply to the court to open the estate, and the court would appoint a personal representative to act as the administrator. This can be the petitioner, but the court will typically empower the closest relative.

Conduct an Asset Inventory

The executor will inventory the assets that comprise the estate and compile all of the ownership documents.

A well-constructed estate plan may include a letter of last instructions. This would be a letter from the testator to the executor to give them the information that they need to administer the estate. The inventory process is simplified if there is a roadmap of sorts to follow.

Valuate the Assets

You have to place a value on the assets that will comprise the estate. This can involve professional appraisals to place a number on collectibles, jewelry, etc.

Take Care of Tax Responsibilities

When you are administering the estate, you have to get a tax identification number from the IRS and establish a bank account for the estate. This is formally called an “employer identification number.”

For most estates, income taxes will be the only taxes that must be paid. However, there is a federal estate tax that is applicable on transfers that exceed the exclusion. At the time of this writing in 2021, the exclusion is $11.7 million.

Pay Other Bills and Estate Expenses

Other final debts will be paid during the probate process. These would include debts that were incurred by the decedent while they were living, and the estate will also have expenses to pay, such as legal fees, appraisal costs, and accounting charges.

Distribute Inheritances

When all the administrative tasks are completed, the executor will be able to distribute the assets to the inheritors in accordance with the stated wishes of the decedent.

Probate Isn’t Always Necessary

We should point out that some types of asset transfers are not subject to probate. Individual retirement accounts are transferred outside of probate if they have named beneficiaries, and the transfer of assets to the beneficiary of a payable on death account would be probate-free.

The probate court would not be involved when a surviving joint tenant inherits property that is held in joint tenancy. Living trust distributions are transferred outside of probate as well.

We Are Here to Help!

There are many different ways to facilitate transfers to your heirs after you pass away. The ideal course of action will depend on the circumstances, and this is why legal counsel is invaluable.

We can gain an understanding of your situation and help you develop a plan that ideally suits your needs. If you are ready to get started, you can reach our Ashland, Kentucky estate planning office at 606-324-5516 and our Florence, Kentucky office at 859-372-6655.

The number in Charlotte, North Carolina or Huntersville, North Carolina is 704-944-3245, and you can use our contact form if you would rather send us a message.