It doesn’t matter if you’re creating an estate plan or preparing for the probate process after a death of a loved one, it’s critical to understand how things will unfold. This allows you to plan accordingly, thus saving time and money along the way.
While the probate process is never exactly the same for two people, there are four basic steps that come into play:
- The filing of the petition: The executor of the estate will file a petition with the applicable probate court. If there is no will, the court will appoint someone as the administrator of the estate. It’s at this time that steps are taken to notify beneficiaries of the proceedings.
- Notice of debts, inventory of assets: The personal representative must provide written notice to all creditors of the estate. They’re also responsible for creating an inventory of all assets, including but not limited to bank accounts, real estate, personal property, business holdings, stocks, bonds and mutual funds.
- The estate pays for all debts: Any debts that remain are paid by the estate. This includes taxes, as well as funeral expenses and those associated with burial. Depending on the circumstances, the personal representative may have the power to sell assets to pay outstanding debts.
- The transfer of property: According to the terms and conditions of the will, property is then transferred as outlined by the will. If the deceased did not have a will, the laws of intestacy come into play.
On the surface, the probate process appears straightforward. However, if you’re directly involved, such as if you’re the executor of a loved one’s will, you’ll soon come to find that things don’t always go as planned.
For example, you may need to make decisions about which assets to sell to pay off debts. Or maybe there’s a will contest, which slows the process and costs the estate money.
If you’re creating an estate plan or preparing to play a large role in the probate process, make sure you have a clear idea of what’s to come. This knowledge will help you make the right decisions at the right time.