A probate proceeding is required within each of the 50 states to settle estates of individuals who are deceased. Probated estates are managed by a probate personal representative who is appointed within the decedent’s last Will or through court appointment when no Will exists.
The probate proceeding is governed under the Uniform Probate Code. Not all states have adopted UPC, while others have adopted only part of the code. Therefore, probate is handled according to probate laws set forth in the decedent’s state of residence.
Probate personal representatives often require assistance from an estate planner or probate attorney. The majority of estate management duties can be handled by the estate administrator to minimize legal fees. The exception to this rule is when family disputes arise over who is entitled to inheritance property and one or more heirs contest the Will.
The first step of probate involves submitting the Will to probate court. If no Will exists, a lawyer submits an original copy of the death certificate to obtain a case number. All documents submitted through probate court should include the assigned case number
The next step involves providing the estate administrator with Letters Testamentary which grant authority to manage the estate. Some states require all aspects of estate management to be supervised through the courts, while others allow unsupervised authority. Executors are informed of how probate proceedings are handled when they receive court authorization to manage the estate.
Some states require estate administrators to post a bond. In most cases, only estate administrators who reside out of state are required to post bond. The fee is paid through the estate and a record of the transaction should remain on file. Estate administrators are responsible for maintaining all financial records and transactions made on behalf of the estate.
When decedents die intestate, a probate proceeding is required to designate an estate executor. Oftentimes, this is the surviving spouse or direct lineage relative. If there is no spouse, or if family members do not want to assume estate management duties, the court can appoint an outside source to settle the estate.
The third step of the probate proceeding involves contacting creditors. If the estate is intestate, probate personal representatives must also locate and notify rightful heirs. Administrators must place a Classified ad pertaining to the decedent’s death. All efforts must be made to locate missing heirs and to settle outstanding debts.
Probate executors must open an estate bank account to record all income and expenses. When inheritance property does not transfer to a surviving spouse, Administrators must secure valuable assets and obtain property appraisals to determine date-of-death value.
If the decedent’s estate is financially incapable of paying outstanding debts, the estate executor can attempt to negotiate outstanding balances or hire a probate lawyer to negotiate debts on behalf of the estate.
Probate executors are required to file a final tax return within 9 months from the date of death. It is best to retain the services of an accountant to prepare estate tax returns. The estate is responsible for paying taxes in full at the time of filing. Otherwise, the IRS will assess penalties and late fees against the unpaid balance.
Once all stages of the probate proceeding are completed, estate executors can distribute inheritance property according to directives of the Will or probate law. Individuals that receive inheritance gifts are required to sign a form acknowledging they received the property or money. Signed receipts are submitted to the court for approval. Once the judge signs off the estate, probate executors are released from their duties and the case is closed.