After a death, a deceased person's estate becomes the subject of legal and administrative proceedings known as Probate, which involves the identification, valuation, and distribution of their assets and the settlement of their debts and obligations.
Estate assets are typically distributed according to the instructions written in a Last Will and Testament, but if the deceased did not have one at the time of their death, their estate will be distributed according to state law, known as Intestate Succession.
Once all debts and taxes have been paid, and assets have been distributed, the estate can be officially closed.
Important parts of an estate and the estate administration process include:
Assets: An estate includes all types of assets owned by the deceased person, such as real estate properties (homes, land, etc.), personal property (jewelry, vehicles, furniture), financial assets (bank accounts, investments, retirement accounts), business interests, and intellectual property.
Liabilities: Liabilities within the estate encompass all outstanding debts and obligations of the deceased, including mortgages, loans, credit card balances, unpaid bills, and other financial responsibilities.
Probate Process: After a person's death, their estate goes through a legal process called probate. Probate involves validating the person's will (if available), identifying heirs or beneficiaries, settling debts, and distributing the remaining assets.
Executor or Administrator: The estate's affairs are typically managed by an Executor or Administrator. An executor is named in the deceased person's will, while an administrator is appointed by Probate Court if the decease did not have a will, or if the named executor is unavailable, unable or unwilling to serve.
Distribution of Assets: Once debts and liabilities are settled, the remaining assets are distributed according to the deceased person's will, or if there is no will, to state Laws of Intestacy. The assets are given to beneficiaries or heirs who are identified in the will or determined by legal guidelines.
Legal Documentation: During probate, legal documents are filed with the court to establish the validity of the will, verify the estate's value, and facilitate the transfer of ownership of assets to beneficiaries.
Estate Taxes: Depending on the jurisdiction and the value of the estate, federal and state Estate Taxes may be applicable. These taxes are typically paid from the estate before distribution to beneficiaries can happen.
Duration of Probate: The length of the probate process varies based on factors such as the complexity of the estate, local laws, and any legal disputes that may arise.