Published on July 17th, 2021 | by Bibhuranjan0
Navigating Asset Division After the Death of a Family Member
After the death of a family member, one of the most daunting tasks for surviving loved ones is sorting through the deceased’s estate. This is why it is important for individuals to understand some of the basic concepts and terms they may encounter during this process. One of the most common terms, which individuals may be familiar with, is the concept of a will to disburse assets to individuals or businesses.
If the deceased had a will drawn up, the first thing for survivors to do is locate the document. Once the will is secured it must be filed with the local probate court within 10-30 days. If an Executor, or the individual responsible for managing and distributing assets and consolidating debts, is not named then the court will appoint a probate administrator. Usually, this is the closest family member or the individual inheriting the majority of the estate. State law provides a list of eligible people to fill this role if no one is named. Once the Executor is appointed, then he or she can assess what the estate contains regarding both assets and debt. Some assets, which are not included, in a will are:
- Life insurance: this is disbursed to a beneficiary named within the policy.
- Real estate and bank accounts: those properties held in joint tenancy with two named individuals are not distributed in probate.
- Property held in a living trust
- Stocks held in a transfer on death (TOD) account.
- Real estate or vehicles held with a title or deed with TOD.
All of the above should have documents of inheritance. If the second person/beneficiary named is also deceased, or simply listed as “my estate,” then that asset may be distributed through probate. The Executor must look at the estate as a whole. He or she does have the authority to sell off real estate or other assets to pay off remaining debts prior to disbursement. Once debts have been paid, then the remaining assets can be divided out.
If a will cannot be located then the estate may be settled by Intestate Succession as dictated by Uniform Probate Code in probate court. In general, only spouses, registered domestic partners, and blood relatives can inherit assets without a will being involved that states otherwise. However, all states do have rules in places that ban certain individuals from inheriting. For example, if the person is someone criminally charged with killing the deceased, or a parent who has refused to care for a deceased child, he or she cannot inherit from the deceased. In cases without a will, the appointed executor must publish, mail, and file a certificate of service to those involved in case they should want to contest the proceedings. The executor must also file any other local required forms.
Some individuals may feel as if they are entitled to some of the deceased’s estate because they had an emotional connection or established relationship. To regulate this, the courts have defined certain statuses to help the inheritance process. A spouse will inherit assets, even when he or she is in a pending divorce state. Common-law marriage is considered a spousal tie, as well as same-sex partnerships that are registered as domestic partners. Children who have a direct blood tie to the deceased will inherit assets, including children that were conceived before death but born after death occurs. Blood children who have been adopted by an unrelated adult outside of the family cannot inherit, though this does not apply if the child was adopted by a stepparent. Children who had been adopted by the deceased can inherit, though foster children cannot. If the child is a minor or found to be incompetent then the court will appoint a guardian to help him or her manage the estate.
The entire probate process can take from a few months to a year. In most states, a family can petition the court to release short-term support funds while the proceeding occurs. In some states, if an estate falls under a certain value, then it may not have to go through the probate process and can instead be disbursed. Eventually, the court will grant the Executor the right to take care of any debts, and divide what is left over to the remaining family, including personal items that do not have individual titles such as jewelry, artwork, and other collections. Probate is time-consuming and does not always benefit those inheriting the estate. This is why it is important for individuals to take estate planning into consideration at all stages of life so that family does not have to try to make difficult decisions during an emotional time.
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