Phase One
The person requesting appointment as personal representative (executor or administrator) hires an experienced probate lawyer to prepare and file a Petition for Probate.
Phase Two
The probate lawyer, or the petitioner without a lawyer, arranges to mail notice to everyone named in the decedent’s Will (when there is a Will) and all his/her legal heirs about the death and the probate hearing.
The notice must also be published in the newspaper where the decedent lived to let creditors know about the hearing. Notice gives everyone notified an opportunity to object to admitting the Will and to the appointment of the personal representative.
Phase Three
The hearing usually takes place several weeks after the matter is filed. The purpose of the hearing is to determine the validity of the Will and to appoint the personal representative. If there are no objections, the court will approve the petition and appoint the personal representative.
Phase Four
The personal representative must identify, take possession of, and manage the probate assets until all debts have been paid and tax returns filed. This process usually takes about a year.
Depending on the terms of the Will (if there is a Will), and on the amount of the decedent's debts, the personal representative may have to sell real estate, securities or other property.
Or, if there are unpaid debts, the personal representative may have to sell some of the estate property to pay them.
Phase Five
After paying the debts and taxes, the personal representative must file a report with the court. The report accounts for all income received and payments made on behalf of the estate.
The judge will then authorize the personal representative to divide the remaining property among the people or organizations named in the Will.
Phase Six
The property will be transferred to its new owners.
Showing posts with label Probate. Show all posts
Showing posts with label Probate. Show all posts
Friday
How are taxes handled in probate?
For federal and state tax purposes, death means two things:
It marks the date of the close of the decedent's last tax year for filing an income tax return, and
It establishes a new, separate entity for tax purposes, the "estate."
For federal taxes, you may have to fill out and file one or more of the following forms. (It depends on the decedent's income, the size of the estate, and the income of the estate):
-Final Form 1040 Federal Income Tax return (the decedent's personal income tax return)
-Form 1041 Federal Fiduciary Income Tax returns for the estate
-Form 709 Federal Gift Tax return(s)
-Form 706 Federal Estate Tax return
For California taxes, the executor must file any needed state income tax return, state fiduciary income tax returns during the probate period, estate tax and gift tax returns.
There may be other taxes, too, like local real estate and personal property taxes, business taxes, and any special state taxes. The executor must also check for taxes owed for years prior to the decedent's death.
It marks the date of the close of the decedent's last tax year for filing an income tax return, and
It establishes a new, separate entity for tax purposes, the "estate."
For federal taxes, you may have to fill out and file one or more of the following forms. (It depends on the decedent's income, the size of the estate, and the income of the estate):
-Final Form 1040 Federal Income Tax return (the decedent's personal income tax return)
-Form 1041 Federal Fiduciary Income Tax returns for the estate
-Form 709 Federal Gift Tax return(s)
-Form 706 Federal Estate Tax return
For California taxes, the executor must file any needed state income tax return, state fiduciary income tax returns during the probate period, estate tax and gift tax returns.
There may be other taxes, too, like local real estate and personal property taxes, business taxes, and any special state taxes. The executor must also check for taxes owed for years prior to the decedent's death.
If I am the beneficiary, do I have to pay bills?
Generally, no. The law says you cannot be made responsible for others’ general debts without your consent.
Unless the decedent gave away his or her assets to someone shortly before dying, or otherwise acted in concert with them to defraud the creditors, the beneficiaries should not have to pay the creditors just because they are beneficiaries.
There may be nothing left in the estate for the beneficiaries after paying the creditors. But, the beneficiaries will not owe the creditors money.
Still, if the children or beneficiaries took property or benefits from the decedent or the estate, or assumed liability for care given the decedent, or guaranteed payment, they can be liable for some or all of the decedent's debts separately.
Unless the decedent gave away his or her assets to someone shortly before dying, or otherwise acted in concert with them to defraud the creditors, the beneficiaries should not have to pay the creditors just because they are beneficiaries.
There may be nothing left in the estate for the beneficiaries after paying the creditors. But, the beneficiaries will not owe the creditors money.
Still, if the children or beneficiaries took property or benefits from the decedent or the estate, or assumed liability for care given the decedent, or guaranteed payment, they can be liable for some or all of the decedent's debts separately.
How do bills get paid in probate?
Part of the probate process is to notify creditors of the death. Notice requirements vary. In some cases, you must provide direct notice. In others, you must publish a notice in a newspaper in the city where the decedent lived.
Creditors must file a claim with the court for the amounts due within a fixed period of time. If the executor approves the claim, the bill is paid out of the estate. If the executor rejects the claim, the creditor must sue for payment.
If there is not enough money to pay all debts, state law determines who gets paid first. The personal representative most likely will sell property to pay approved creditor claims.
Creditors must file a claim with the court for the amounts due within a fixed period of time. If the executor approves the claim, the bill is paid out of the estate. If the executor rejects the claim, the creditor must sue for payment.
If there is not enough money to pay all debts, state law determines who gets paid first. The personal representative most likely will sell property to pay approved creditor claims.
Do I have to use a lawyer for probate?
No. But, it may be a good idea if the estate is complex. A lawyer can help you meet all deadlines and avoid mistakes and delays.
A lawyer can sometimes help avoid disagreements among family members over minor or major issues. But the lawyer represents the interests of the personal representative, not the beneficiaries.
You may not need a lawyer if:
-you are the sole beneficiary,
-the decedent's property consists of common assets (like house, bank accounts, insurance, etc.)
-the Will is simple and straightforward, and
-you have access to good Self Service materials.
In most cases, the personal representative may never see the inside of a courtroom. But, she/he will have to go to the Court Clerk's office.
A lawyer can sometimes help avoid disagreements among family members over minor or major issues. But the lawyer represents the interests of the personal representative, not the beneficiaries.
You may not need a lawyer if:
-you are the sole beneficiary,
-the decedent's property consists of common assets (like house, bank accounts, insurance, etc.)
-the Will is simple and straightforward, and
-you have access to good Self Service materials.
In most cases, the personal representative may never see the inside of a courtroom. But, she/he will have to go to the Court Clerk's office.
How long does probate take?
California law says the personal representative must complete probate within one year from the date of appointment, unless s/he files a federal estate tax. In this case, the personal representative can have 18 months to complete probate.
If probate has not been completed by that time, the personal representative must file a status report to the court to explain what still has to be done and how much time that will take.
If the personal representative does not report to the court, the beneficiaries can ask the court to order him or her to file an accounting or take other actions to close probate. The court can remove the personal representative and appoint someone else.
Sometimes there are circumstances that can make probate take longer. If there is a Will contest (a claim filed with the court that all or part of the will is not valid), or the size and complexity of the estate requires extra time, or it is hard to find beneficiaries, the process can drag out. Some probate cases take years to resolve.
If probate has not been completed by that time, the personal representative must file a status report to the court to explain what still has to be done and how much time that will take.
If the personal representative does not report to the court, the beneficiaries can ask the court to order him or her to file an accounting or take other actions to close probate. The court can remove the personal representative and appoint someone else.
Sometimes there are circumstances that can make probate take longer. If there is a Will contest (a claim filed with the court that all or part of the will is not valid), or the size and complexity of the estate requires extra time, or it is hard to find beneficiaries, the process can drag out. Some probate cases take years to resolve.
Do living trust go through probate?
No. When a living trust holds title to some of the decedent's property, that property also passes to the beneficiaries without probate.
Do life insurance and retirement accounts go through probate?
No. The benefits can be paid directly to a named beneficiary. Money from IRAs, Keoghs, and 401(k) accounts transfer automatically to the persons named as beneficiaries. Bank accounts that are set up as pay-on-death accounts (PODs) or "in trust for" accounts (a "Totten Trust") with a named beneficiary also pass to the beneficiary without probate.
When should I go through probate?
Probate makes sense only if your estate will have complicated problems, such as many debts that can't easily be paid from the property you leave.
Whether to spend your time and effort planning to avoid probate depends on a number of factors, most notably your age, your health, and your wealth. If you're young and in good health, adopting a complex probate-avoidance plan now may mean you'll have to re-do it as your life situation changes.
Whether to spend your time and effort planning to avoid probate depends on a number of factors, most notably your age, your health, and your wealth. If you're young and in good health, adopting a complex probate-avoidance plan now may mean you'll have to re-do it as your life situation changes.
Who handles probate?
If there isn't any will, or the will fails to name an executor, the probate court names someone like and administrator to handle the process. Most often, the job goes to the closest capable relative or the person who inherits the bulk of the deceased person's assets.
If no formal probate proceeding is necessary, the court does not appoint an estate administrator. Instead, a close relative or friend serves as an informal estate representative.
If no formal probate proceeding is necessary, the court does not appoint an estate administrator. Instead, a close relative or friend serves as an informal estate representative.
Does all property have to go through probate?
No. Most states allow a certain amount of property to pass free of probate or through a simplified probate procedure. In California, for example, you can pass up to $100,000 of property without probate, and there's a simple transfer procedure for any property left to a surviving spouse.
In addition, property that passes outside of your will -- say, through joint tenancy or a living trust -- is not subject to probate.
In addition, property that passes outside of your will -- say, through joint tenancy or a living trust -- is not subject to probate.
How does probate work?
After your death, the person you named in your will as executor -- or, if you die without a will, the person appointed by a judge -- files papers in the local probate court. The executor proves the validity of your will and presents the court with lists of your property, your debts, and who is to inherit what you've left. Then, relatives and creditors are officially notified of your death.
Your executor must find, secure, and manage your assets during the probate process, which commonly takes a few months to a year. Depending on the contents of your will, and on the amount of your debts, the executor may have to decide whether or not to sell your real estate, securities, or other property. For example, if your will makes a number of cash bequests but your estate consists mostly of valuable artwork, your collection might have to be appraised and sold to produce cash. Or, if you have many outstanding debts, your executor might have to sell some of your property to pay them.
In most states, immediate family members may ask the court to release short-term support funds while the probate proceedings lumber on. Then, eventually, the court will grant your executor permission to pay your debts and taxes and divide the rest among the people or organizations named in your will. Finally, your property will be transferred to its new owners.
Your executor must find, secure, and manage your assets during the probate process, which commonly takes a few months to a year. Depending on the contents of your will, and on the amount of your debts, the executor may have to decide whether or not to sell your real estate, securities, or other property. For example, if your will makes a number of cash bequests but your estate consists mostly of valuable artwork, your collection might have to be appraised and sold to produce cash. Or, if you have many outstanding debts, your executor might have to sell some of your property to pay them.
In most states, immediate family members may ask the court to release short-term support funds while the probate proceedings lumber on. Then, eventually, the court will grant your executor permission to pay your debts and taxes and divide the rest among the people or organizations named in your will. Finally, your property will be transferred to its new owners.
What is Probate?
Probate is a legal process that takes place after someone dies. It includes:
-proving in court that a deceased person's will is valid (usually a routine matter)
-identifying and inventorying the deceased person's property
-having the property appraised
-paying debts and taxes, and
-distributing the remaining property as the will (or state law, if there's no will) directs.
Typically, probate involves paperwork and court appearances by lawyers. The lawyers and court fees are paid from estate property, which would otherwise go to the people who inherit the deceased person's property.
-proving in court that a deceased person's will is valid (usually a routine matter)
-identifying and inventorying the deceased person's property
-having the property appraised
-paying debts and taxes, and
-distributing the remaining property as the will (or state law, if there's no will) directs.
Typically, probate involves paperwork and court appearances by lawyers. The lawyers and court fees are paid from estate property, which would otherwise go to the people who inherit the deceased person's property.
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