Every day, approximately 7,452 people die in the United States – which is about one death every 12 seconds. This means that by the time you read the last word in this sentence, at least one person has died. This data is from the United Nations World Population Prospects 2017.
With these many deaths in one country in a day, have you ever wondered how many properties or how much debt are left behind in one day? Where do these properties go? Who pays off the debts?
Cantley Dietrich explains that when a loved one passes away, their affairs must be put in order and the assets must be distributed to the right beneficiaries. Probate accomplishes all these.
What is Probate?
Probate is the legal process of distributing a decedent’s assets by transferring them to the proper beneficiaries, including a creditor to whom the deceased owes money. The importance of a will comes into play during a probate. If the deceased left a will behind, the executor could easily present the will for probate in court in the county or city where the deceased lived or owned a property.
If the decedent didn’t manage to draw up a will before dying, their estate would be considered intestate, and the distribution of their assets would become the responsibility of the probate court. When this happens, the court appoints an administrator of the deceased’s estate. This responsibility often goes to the spouse or the adult children of the decedent.
The Probate Process
The probate process has slight variations from state to state, but the general steps are as follows:
1. File a Petition with the Probate Court
If a will is present, you can take it to the probate court clerk and file it. A judge will also appoint the estate executor chosen by the deceased as stated in the will. If there’s no will, you need to file a petition for probate so the court can appoint an administrator of the deceased’s estate.
2. Take Inventory of the Estate and Give Notice to All Known Creditors
If you get the role of the executor or administrator, you should first identify the decedent’s assets. Review their documents and bank statements. Through this, you’ll discover if the decedent had any investments, insurance policies, and different property deeds. For other things such as paintings and jewelry, you may have their value appraised.
After gathering all the essential documentation regarding all the deceased’s assets, you’ll have to notify financial institutions that the owner has died so they can freeze the deceased’s accounts. Afterward, give a written notice to all creditors of the estate so that they can make a claim on assets from the estate within the given limited period.
3. Settle the Decedent’s Final Bills
As executor, you must determine which creditor’s claims are legitimate and pay them accordingly from the estate. After this, you must settle the decedent’s final bills and the cost of administering the estate such as legal, insurance, and mortgage payments.
4. Distribute the Balance to Beneficiaries
After all the deceased’s debts and bills have been paid, you can now distribute what’s left of the estate to beneficiaries named in the will or, if no will exists, the surviving family members in the order of intestate succession.
Not every estate requires probate, though. Some states in the U.S. even have laws in place for small estates that don’t exceed a certain value. Either way, the process of probate shows how important it is for families to plan and update legal documents regularly.