Throughout our lives, most of us will have to deal with the struggles that come from losing a loved one. Along with the emotional burdens that come with the death of a beloved family member, there are also a fair amount of financial issues that must be addressed. To make financial issues run seamlessly following a loved one's death, estate administration comes into play. The experience can be pretty overwhelming without having a firm understanding of the process. Read on to learn more about the probate estate administration process and how to administer an estate.
What is probate estate administration?
The estate administration process can seem overwhelming when you're first getting started. However, with a little guidance, you will be well on your way to understanding the estate administration process in no time at all. The fundamental element to understand is that when a person dies, all of their possessions become a part of their estate. These possessions include everything from real estate to money to stocks to personal belongings. This means that the estate administration is simply the process of managing and distributing a person's property after their death.
What is the process for administering an estate?
Essentially, there are three steps when it comes to estate administration. The first step in estate administration refers to the process of collecting and managing everything within an individual's estate. The second step requires paying any debts or taxes owed on the individual's possessions. The final step is distributing the remaining property to the heirs of the estate.
Probate estate administration is done when someone passes away intestate (without a Will), or with a Last Will and Testament, but no Trust.
Trust Administration helps save time and money by avoiding the probate process. This involves working with an estate planning attorney to (typically) utilize a revocable living trust to hold assets and therefore set the framework for trust estate administration without involving the courts.
Probate estate administration steps
Generally, older individuals will have a will put into place before their passing. In this will, they will often appoint an executor or personal representative to be responsible for managing their estate. However, in some circumstances or with sudden deaths, a written will may not have been drawn up. This can make the process of administering the estate a bit more complicated. However, with the help of an experienced estate lawyer, these matters can be smoothed out rather quickly.
After the deceased's tangible property is secured, cataloged, and appraised, the estate administration steps are pretty straight forward. If named in the will, the estate manager should collect the necessary documents of finances, taxes, debts, and a list of cataloged property to their estate attorney's office. Remember, this is not something you have to rush. Allow yourself and family members the needed time to grieve before diving into the financial matters. Once you are ready, an experienced attorney will be able to help you easily navigate the estate administration process. The general estate administration steps are as follows:
1. Filing the Will
The first step in estate administration is to file the will. You must file the will and petition at the probate court to officially be appointed as the executor or personal representative of the estate. If the deceased did not leave a will, heirs will be required to petition the court to be appointed as the administrator of the estate. If there is no Will, then an “intestate” probate administration is opened and the Florida intestacy statute dictates where assets will go.
2. Collecting the Assets / Marshalling Assets
The next step is to collect (probate attorneys call it “marshalling”) the assets of the deceased. This means an inventory of all assets will need to be collected. This inventory list will need to be filed with the probate court.
3. Paying Bills and Taxes
The next step is to go through the process of paying bills and taxes. In most cases, a state or federal estate tax return will be needed. This must be filed within nine months of the deceased's death date. Penalties and interest will likely be applied to the estate if filing deadlines are missed.
As an example, in Florida, as a matter of course, a probate judge will require that AHCA (the agency that oversees Medicaid) be notified of an elderly Floridian’s death to make sure that there is no Medicaid estate recovery needed.
4. Filing Tax Returns
Another step that will need to be taken is to file a final income tax return for the deceased.
5. Distributing Property
Following the initial filings, the personal representative of the estate will then be able to distribute the majority of the assets within the estate. This process can take up to a year after the deceased's death date to go through.
6. Filing a Final Account
The final step in estate administration is the filing of a final accounting. During this final step, the executor of the estate must file an account with the probate court listing any income the estate has accumulated since the death date of the deceased. They must also list all expenses and estate distributions in this final account filing. After this final account filing, the executor / personal representative will be able to distribute anything that is left in the estate's closing reserve.
Consultant with an Experienced Estate Planning Attorney Today
Estate planning can be a complicated process to navigate alone. Working with an experienced estate planning attorney is a worthwhile decision to help with estate administration. For further guidance in your estate planning process, consult with an experienced estate planning attorney today. Or, to speak with a probate attorney, call to set up a consultation.
No matter what you need assistance with, don’t wait - schedule a consultation today to discuss a plan for your future.