Probate estate refers to financial assets, real estate, titled property and valuable assets that belong to a person who has died. Probate is the legal process used to determine value of assets, validate decedents’ last will and testament, pay outstanding debts, and distribute inheritance gifts to designated heirs.
Multiple factors are involved when settling a probate estate. An estate administrator is named within the Will and is responsible for a variety of duties. When decedents die intestate (without executing a Will) a probate judge appoints someone to the position. In most cases probate administrators are the surviving spouse, adult children, or direct lineage relatives.
When decedents’ estates are complex or when family discord exists, a probate attorney or professional estate planner can be designated as the probate executor. Neutral third parties can squelch potential problems such as heirs contesting the will or arguing over who should receive family heirlooms.
Estate administration duties include obtaining appraisals for real estate and collectibles such as art, antiques and jewelry. Date-of-death values must be obtained for financial holdings including individual retirement and investment accounts. Outstanding credit card bills, home loans, student loans and unsecured debts must be paid.
Administrators are responsible for contacting government agencies when decedents receive monetary benefits. These can include Social Security, Medicare, Medicaid, or Veteran’s Administration.
Probate estate administration also involves overseeing maintenance of real estate holdings. This can include paying mortgage payments, property taxes, homeowner’s insurance premiums, homeowner’s association dues, and overall care of the property.
If the estate does not possess the financial means to pay real estate related expenses, the court can order the Administrator to list the property for sale through a realtor.
Inheritance assets cannot be distributed to heirs until the estate is settled. The duration of probate depends on court caseload, complexity and value of the estate. On average, probate extends between six and nine months. If the estate is complicated or when heirs contest the Will, probate can drag on for years.
Probate laws vary by state. Most states require Administrators to file a petition outlining estate settlement. Others extend court confirmation which allows Administrators to manage the estate without court interference.
Estate administrators are compensated for duties associated with managing a probate estate. Fees are established according to state laws and often outlined within the decedent’s Will.
Administrators should be capable of handling finances, negotiate with creditors, file paperwork through the court and mediate with family members if disputes arise. If a designated estate executor is unable or unwilling to administer the estate they must provide a written request to be removed from their duties to the court.
When establishing a last will and testament, experts recommend appointing two Administrators. If the first named executor is unable to fulfill duties, the second named executor can assume duties and move forward with settling the estate.