When a person passes away, the family is faced with the daunting task of figuring out what legally happens with the person’s possession. With a properly structured estate, this can happen quickly and with little conflict. For many families, however, it can be a long and frustrating process.
Estate administration is the process of dividing a person’s accounts, possession, and real estate under the supervision of the court. It starts with a person being appointed executor by the Clerk of Court. If the loved one had a Last Will and Testament, the Will is filed with the Clerk’s Office and determines how the assets are disbursed. If there is no Will, state law will determine how the assets are divided. After the executor is formally appointed, the executor will have four months to gather information about their loved one’s assets and file an inventory with a public auditor called the Commissioner of Accounts. Every year thereafter, until the estate is closed, the executor will file a statement of accounts that documents how the assets have been gathered and disbursed.
Some families like having the courts involved because it provides peace of mind that the administration has been done correctly. It is also easier to handle certain assets, such investments or real estate, if there is only one person in charge. Most families, however, choose to avoid the administration process by creating a trust or using beneficiary designations. During an administration, costs and fees are charged by the court system at every step of the process. Plus, the record keeping requirements can be overwhelming. The court may remove an executor who does not comply with the paperwork requirements and impose other penalties. In order to preserve the funds available to heirs and make things easier for their families, many people choose to plan to avoid this process through estate planning.
If you have questions about the estate administration process, or how to plan to avoid administration, please do not hesitate to schedule a free consultation with McDermottWard at 757-722-0611.