Probate
administration is something that many people fail to fully grasp. This
is compounded by the difficult times in which such administrative action
is necessary, usually after a person has passed on and their last will
and testament is acted upon. It is important to understand the basics of
probate administration because families often find it difficult to come
to agreement about money, property, or other inheritances after a loved
one has passed away. The administrator is responsible for the smooth
transfer of assets or pieces of the deceased person's estate to their
beneficiaries. There are a few basics that are crucial to understanding
the process and you don't have to be an attorney or probate administer
to see the complexity of such a position.
The
first basic tenet of probate administration is the fact that it costs
money. This may seem like a simplistic statement, but many families are
caught unaware of the potential costs of having their loved one's assets
divided up in court. If at all possible, the hiring of a probate
administrator is something that should be agreed upon before the
deceased person passes away. This ensures that the deceased person's
wishes are honored and the family is treated fairly and properly by the
administrator. It is not uncommon for administrators to charge fees
which can be later deduced from the value of the estate or assets. These
costs are usually deducted before the assets are split between the
family members and beneficiaries. The executor of the will, or the
person who is officially tasked with carrying out the actions described
in the will, will work closely with the administrator and the family to
make sure the last wishes of the deceased are honored and respected. In
many instances, if the estate owes money and has to go to probate court,
the executor is required to provide a fidelity bond which acts as a
sort of deposit against the possibility that the executor will abuse
their power to distribute the deceased's assets.
Another
important concept to keep in mind is that there is usually a strict
time limitation for the beneficiaries to receive the assets or portions
of the estate. Probate administration planning should be incorporated
into he last will and testament of the deceased whenever possible. If
one is not selected before the time of death, a petition can be filed by
the family members that will help to resolve the administration issue
and nominate one to take care of such duties. On a related note, real
estate or personal taxes as well as lawsuits and settlements can also be
levied during the first few weeks or months after a person passes on.
These are also time-sensitive judgements or actions and will most often
come out of the estate or assets before family even gets to divide them
up.
Such
an administrator also helps to notify creditors that the deceased
person has passed and acts as a middleman of sorts for the family. The
administrator will likely help the family notify these creditors and
help them to publish or post legally-necessary notices. This allows each
creditor to clear out any remaining accounts or settle them with the
deceased's assets prior to the distribution to the named beneficiaries.
This can be a long, complex process, especially if the person who passed
away had lots of credit card debt or loans with banks and other
creditors. Just like with taxes or lawsuits levied against the deceased,
the beneficiaries are second in line to receive their loved one's
assets and estate.
Each
state handles probate differently and it is certainly worth your time
to research and learn more about the details of the transfer of assets
to beneficiaries after a loved one passes. The best way to be prepared
and reduce the need for probate administration or even the potential for
inter-family legal struggles is to have a conversation with your loved
ones about such issues. Make sure their decisions are in writing and
hold up to legal scrutiny. Once a person is gone, family members often
scramble to be first in line for any benefits or inheritances. It is
amazing that when money is on the line, the family's social dynamic can
change almost overnight.
If
a person passes on without a last will and testament, the spouse or
next of kin is usually awarded the estate or assets associated with the
estate. Again, these assets are handed over after the Federal and state
governments make sure no back taxes or liens are owed and after
creditors give their input according to the legal contracts entered by
the now deceased. An excellent way to avoid all the probate headaches is
to create a trust that allows for a probate-free transfer of money to
the family of the loved one who has passed.
Article Source: http://EzineArticles.com/7084586
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