The process of probate is a factor that you should take into consideration when you are putting your estate plan together. This process takes place under the supervision of a court, and it will come into play if you pass away while you are in direct personal possession of property.
Your estate would pass through probate if you have a last will, and it would also be relevant if you had no estate planning documents at all at the time of your passing.
Probate and the Estate Administrator
Someone has to handle the business of your estate after you pass away. If you utilize a last will to state your final wishes, this person would be the executor or executrix. An executor is a male estate administrator, and an executrix is a female who assumes this role.
You can nominate an executor or executrix when you create your last will. If you fail to do so, the court would be forced to appoint a personal representative to handle the estate administration tasks.
Since you have the ability to name your own estate administrator, you should certainly nominate an executor, so that you can be sure that the person that you would like to empower has the ability to handle the business of your estate after you are gone.
You have to be very discerning when you are choosing an estate administrator. The executor or executrix will be handling a number of different business oriented tasks. This is not a ceremonial position that you bestow upon someone as an honor; there are very specific duties that must be undertaken.
What are these duties? The executor will be required to admit the will to probate, and the probate court will determine its validity. The property that will eventually be distributed to the heirs must be identified and inventoried, and this responsibility will fall to the executor.
The executor will take care of routine details, like the termination of credit cards and leases, and financial institutions and government agencies like the Social Security Administration will also be notified.
During probate, the executor will open up a bank account on behalf of the estate, and final taxes will be paid. There is also the matter of outstanding debt beyond taxes. The executor is required to notify creditors, and they must be paid before the assets that comprise the estate are distributed to the heirs that are named in the last will.
Property appraisals and liquidation can be necessary so that liquidity can be spread among multiple different inheritors. The executor will also be the point of contact for anyone who has an interest in the estate, so tactful communication skills will definitely be an important attribute.
After the probate court closes the estate, the executor can follow the instructions that are laid out in the last will and distribute assets to be heirs to the estate.
When you digest all of these facts, you can see that it is not simple to act as the executor of an estate, especially if there is a good bit of property involved. You have to make sure that the person that you want to nominate understands all the responsibilities.
Handling all of these tasks is not necessarily a whole lot of fun, so you have to be certain that the executor is willing to take on the responsibility, and the role can be time-consuming. We should point out the fact that the estate administrator is entitled to payment for his or her time and trouble, so that can be somewhat of an incentive.
Impartiality is something that is quite important as well, and you don’t necessarily have to name someone that you know personally to act as the executor.
There are professional fiduciaries that handle estate administration tasks for a fee. Banks and trust companies provide these services, so you may want to consider the utilization of a professional estate administrator.
Schedule a Consultation
There are many different ways that you can proceed when you are planning your estate. You should understand all of your options thoroughly so that you can preserve your resources optimally and provide for everyone that you love in the ideal manner.
Our firm can help if you would like to discuss your estate planning objectives with a licensed professional who really cares. We have assisted countless families throughout the Indianapolis area, and we would be glad to help you put a tailor-made plan in place.
To set up a consultation, give us a call at (317) 684-1100 or send us a message through our contact page.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.