Probate is the legal process of taking an inventory of a deceased’s estate, fulfilling obligations to creditors or claimants, and distributing remaining assets to the deceased’s beneficiaries. Probate can vary considerably in length and complexity, sometimes short and straightforward, other times complicated and drawn out.
If you’re acting as an estate administrator or executor, or you’re a beneficiary, read below to learn about the five basic steps of probate.
1. Filing public notice
A public announcement of the deceased’s passing typically must be made. This announcement gives potential claimants and beneficiaries notice of the estate’s probate and allows them to file claims against the estate. In some states, this step may require the estate to publish a death notice in the local newspaper.
2. Inventorying and appraising assets
After the probate court appoints an administrator, that individual must inventory property in the estate. The probate estate generally includes two types of property: real and personal. Real property would include buildings, land and other real estate. Personal property represents anything else, including personal possessions, bank accounts and stock shares. The estate administrator must establish a value for all real and personal property. Also included in the inventory is any money owed to the estate, such as loans, final paychecks and insurance policies. For some property—such as a house, rare coin collection or antiques—the administrator may want to hire an appraiser to establish value. This property inventory and approximate value need to be filed with the probate court.
3. Paying creditors, expenses and taxes
While the estate is going through probate, certain expenses will need to be paid by the estate. This could include outstanding bills from before the deceased passed away, along with maintenance expenses for the estate property. Expenses also may include fees for the probate lawyer, appraisers and other professionals supporting the probate process.
4. Transferring remaining assets to beneficiaries
When the estate has been inventoried and all claims, debts and expenses are paid, the administrator should distribute remaining assets to the proper beneficiaries. When a will exists, much of this distribution will be dictated in the will. In situations without a will, state law will direct how remaining assets are distributed.
5. Submitting final settlement to the court
After the remaining estate assets are distributed, the administrator must submit a final accounting to the court of all of his or her dealings on behalf of the estate. This is the final point for the court and outside parties to evaluate how the administrator handled the estate’s affairs. Any party that objects to any aspect of the probate process may come forward and make objections known to the court. When the probate judge approves the final settlement, the estate is considered closed and the administrator’s role is complete.
Navigating the probate process may be the appropriate time to reevaluate your own life insurance needs. One of our knowledgeable Bankers Life agents can review your coverage, help you with beneficiary or coverage changes and recommend products help meet your changing needs. Talk to an agent today!