Estate administration is the process of finalizing a person’s financial affairs and distributing their property after their death.
Probate is the process by which a Will is admitted to the Court and the named Executor is formally appointed by the Court to administer the decedent’s estate. If there is no Will, the decedent’s spouse, a child, a sibling or parent may petition the Court to be appointed as Administrator.
This begins the process of managing a decedent’s estate, which includes paying their debts and collecting, verifying and distributing assets to beneficiaries in accordance with the Will or intestate succession laws. Certain assets such as life insurance policies and retirement accounts have designated beneficiaries and will be transferred outside of the estate. Jointly owned assets pass directly to the surviving owner. Assets held in trust are distributed to the beneficiaries of the trust according to the terms of the Trust Agreement.
Decedent’s assets may include real estate, investment accounts and bank accounts. Assets may also include things such jewelry, antiques and art collections. These assets will have to be liquidated, transferred to heirs or managed.
Debts will also have to be managed or settled, such as loans, medical bills, utility bills, unpaid taxes and credit card debt. The executor/administrator has a duty to advertise the estate to place potential creditors on notice of the passing of the decedent. They will then have a year from publication to make a claim. If the estate has insufficient funds the debts will be paid in order of priority.
An inheritance tax return will need to be filed within nine month of the date of death. A final personal income tax return will also need to be filed. Upon approval of the inheritance tax return by the Department of Revenue, the remainder of the estate can be distributed to the heirs.
Some common issues that may be faced by executors and/or administrators are family conflicts and contest of the Will by heirs and potential beneficiaries. In light of these issues, the executor/administrator should keep meticulous records and establish good communication with beneficiaries.
Taking all of these factors into consideration, the entire estate administration process can take anywhere from six months to two years.
