When you are creating your estate plan, you will likely need to consider several goals at the same time. One thing it may not occur to you to consider is the cost of administering your estate after you are gone. To help you understand why this is important, the Nashua estate planning attorneys at DeBruyckere Law explain who pays the costs associated with administering an estate.
What Is Involved in Administering an Estate?
When you die, you will leave behind a legal estate consisting of all assets owned by you at the time of death. This includes both real and personal property as well as both tangible and intangible assets. All estate assets must eventually be transferred to new owners. The transfer of assets, among other goas, is accomplished during the legal process known as probate. During probate, the Executor of the estate has numerous duties and responsibilities, including:
- Identifying and securing assets. As soon after the decedent’s death as possible, the Executor should start identifying and securing estate assets. This may be as simple as closing a bank account or as complex as shutting down a business.
- Initiating probate. Probate usually occurs in the county wherein the decedent was a resident at the time of his/her death. To open the probate of an estate the Executor must obtain a certified copy of the death certificate, a signed, original copy of the decedent’s Will, and a petition to open probate. By this point, most Executors have retained the services of an experienced estate planning attorney who will prepare the necessary petition.
- Categorizing and valuing assets. The Executor must obtain a date of death value for all estate assets and decide if they are probate or non-probate assets because some assets bypass the probate process entirely.
- Notifying creditors and reviewing claims. Known creditors may be notified individually. Unknown creditors are notified via publication in a local newspaper. Creditors then have a statutory amount of time to file a claim against the estate. The Executor must review all claims and approve or deny them.
- Litigating any challenges. If a Will contest is filed, the Executor is required to defend the Will submitted for probate throughout the litigation that will follow.
- Paying taxes. The Executor must determine if any state or federal gift and estate taxes are due from the estate. All necessary tax returns must be filed, and any tax debt owed must be paid out of estate assets.
- Distributing assets. Finally, the Executor must prepare any necessary legal documents to effectuate the transfer of the remaining estate assets to the intended beneficiaries.
The Cost of Administering an Estate
Even a relatively modest estate will take several months to get through the probate process. More valuable and/or complex estates can take years to probate. Keep in mind that probate assets cannot be distributed to the intended beneficiaries until the conclusion of the probate process. In the meantime, those assets must be protected and maintained which can be costly. Moreover, everyone involved in the process is also entitled to a fee, such as the Executor, attorneys, accountants, and appraisers. Ultimately, formal probate can be expensive – and all those expenses are paid out of the estate assets. The value of the estate you pass down to loved ones can be significantly diminished once all the costs associated with administering the estate are paid.
Contact Nashua Estate Planning Attorneys
If you have additional questions or concerns, please contactthe Nashua estate planning attorneys at DeBruyckere Law Offices by calling our New Hampshire office at (603) 894-4141 or our Massachusetts office (978) 969-0331 to learn more or visit our website at https://dadlawoffices.com .
No. If an estate qualifies, it may be able to use an alternative to formal for small estates. This saves both time and money during the administration of an estate.
Yes. Trust assets are not part of the probate process, meaning they can be distributed without the need to wait for probate to conclude.
Incorporating probate avoidance strategies into your overall estate plan is one of the best ways to protect your assets from being used to pay for the costs associated with probating your estate.
- Fewer People Have an Estate Plan in Place Than in Years Past - February 16, 2021
- Biden Administration Could Reduce Estate Tax Exclusion - February 1, 2021
- Estate Planning for Singles - January 28, 2021