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Twelve Months of Financial Milestones Working with Financial and Legal Advisors
What Are the Steps in the Probate Process? What Is the Probate Process if There Is No Will? How Do I Pay the Bills Until the Estate Is Settled? What Does the Executor or Administrator Do? What Should I Do if I
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SETTLING THE ESTATE
All the property that a person owns is part of his or her estate. An estate can include clothes, jewelry, tools, cars, musical instruments, a house, land the house is built on, cash, bank accounts, retirement accounts, stocks, bonds, and other items. After a person dies, his or her estate must be distributed. How the estate is distributed is determined by several things: the will, the beneficiaries named (if any), the way the property is titled, any letter of instructions, and the laws of the state in which the person lived. Expenses of the estate, debts of the person who died, and estate taxes, if applicable, must all be paid. The remainder is divided among survivors. This dividing up of a person’s belongings is called “settling the estate.” A small estate often can be settled in a few weeks, and most larger estates are settled within a year and a half. The probate court takes care of the business of an estate until it is divided. This process is called “probate.” Generally, certain property that was in your loved one’s name alone must first “go through probate” before you or other survivors can use it. This property might include bank and brokerage accounts, stocks, bonds, mutual funds, business interests, retirement plans, or life insurance proceeds if the estate (instead of a person) is the named beneficiary. How property can avoid probate is discussed later. If the value of your loved one’s estate is small (the amount is determined by each state and ranges between $25,000 and $75,000), it may be exempt from the probate process. Some estates may use “simplified probate,” which involves registering the will with the clerk of the state probate court, carrying out the terms of the will, and showing the clerk that it has been done.
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What Is an Estate?
