There are a great many variables that can affect the duration of the probate process. If the estate is small and has a reasonable amount of debt, six to eight months is a fair expectation. With a larger estate, it will likely be more than a year before everything settles.
The executor can give you an idea of how complex the estate is and therefore how long the probate process will be. If you feel that the executor is taking too long, you might look into any regulations that the state or probate court is placing on the process.
State laws requiring a long window of time for creditors to make claims could prolong the process. On the other hand, there may be laws that require the executor to act more quickly in settling the estate. There funeral expenses to take care of right away, and other bills soon start to pile up. And there are lots of non-monetary things to take care of as well, including grieving. Under the very best circumstances, the estate administration process takes an average of months, but death rarely brings out the best in people, so it often takes much longer to settle an estate.
An example of just how long it can take to settle an estate was on display in Durham, North Carolina last month. However, the estates of many regular people take years to settle as well. One of the main reasons estates drag on is a lack of estate planning. If a loved one dies without a will, it can take years to sort out what is to be done with his or her assets and how to pay off debts.
Hiring a professional estate administrator is often very helpful in these situations because dealing with such an estate can be like taking on a part-time job. Estate administrators typically charge a fee based on the size of the estate, and collect that fee from the estate, so this is an option for all different sizes of estates.
The second thing that can hold up the settlement of an estate is a family dispute. When there are not clear instructions about who gets what, or the choices made by the deceased lead to hurt feelings, the resulting fight can tie up an estate for years. If the parties choose to get lawyers involved, this can also be quite costly since the fees of the lawyers who are defending the estate plan are deducted from the estate.
It can get to be a Dickensian-like scenario where the costs of fighting over the estate lead to the estate going bankrupt and nobody getting anything. These are the two most common reasons an estate may take more than the average months to settle, but they are by no means the only reasons for delay. Complex estates, where there are substantial assets or real estate issues that need to be resolved, for example, can also take a long time to settle.
What is Medicaid Planning? What Happens During Probate? What Is a Revocable Living Trust? What Can Delay the Probate Process? The successor trustee can now accept the appointment without probate court involvement if the deceased left a living trust. A delay of up to two weeks is common from the date of death until probate is officially opened in some states. For example, a New Jersey court cannot accept a will for probate until 10 days have passed since the date of death. Anyone who wants to object to the will can do so during this time.
Next, the date-of-death values of the deceased's assets must be determined. Most state probate courts require the filing of a comprehensive list of all property owned by the decedent along with corresponding appraised values.
This is additionally important information for the beneficiaries. Any capital gains tax will be calculated using these date-of-death value should a beneficiary decide to sell an inheritance. This is referred to as a step-up in basis, and it's a good thing. Otherwise, any capital gains tax would be based on the difference between the sales price and whatever the decedent paid to purchase the asset, which could be a great deal more.
The deceased's final bills, creditors, and ongoing administration expenses must be paid before the probate estate or trust can close and transfer the remaining assets to beneficiaries. This occurs after the value of the deceased person's assets has been established and, in the case of a probate estate, after the list has been supplied to the court. Estate executors are required to notify all potential creditors of the deceased, both those they know about and those they might not be aware of.
This is typically achieved with a newspaper notice, alerting creditors to the death and instructing them how to make claims to the estate for the money they're owed. Creditors then have a prescribed period of time to make claims, depending on state law, but it can run simultaneously with the inventory period in some states.
The executor has the right to decide whether claims are valid and whether they should or should not be paid. Denying claims can result in numerous court hearings where a judge will ultimately decide, and all of this can eat up a lot of time. For example, in Washington, creditors have 30 days to file a suit against a rejected claim and that could slow down the process of closing the estate. The decedent's final bills will probably include cell phone bills, credit card bills, and medical bills, as well as the ongoing expenses of administering the estate or trust, such as storage fees, utilities, and attorney's fees.
Any mortgages and other secured debts must also be resolved. And payment to creditors can take some time, depending on state law. Most states require that all known creditors must be sent notice, letting them know of the death and how long they have to make claims for the money owed to them.
Some states also require that a notice for unknown creditors be published in a local newspaper, sometimes more than once for a period of weeks. The deadline for filing creditor claims can vary considerably from state to state, from just days in Texas, to as long as seven months in New York, and an entire year in Massachusetts. This might not affect smaller estates, however, if state law includes provisions for summary or simplified proceedings for these estates. A big snarl can occur if the deceased didn't leave a will.
This doesn't mean that the estate doesn't have to be probated, but rather that the court will be more heavily involved in the process every step of the way. The judge will have to appoint someone to act as personal representative if deceased didn't nominate anyone in a will.
State law will determine which heirs will receive bequests from the estate and in what percentages. Even simple steps in the process will take longer than they would have if a will had been available.
It takes longer to probate an estate that owes estate taxes because a taxable estate can't be closed until a closing letter is received from the Internal Revenue Service. A closing letter must be received from the state taxing authority as well if state estate taxes are also due. It can take anywhere from six to eight months after filing an estate tax return before receiving any type of response from the IRS.
Probate should be relatively simple if an estate is comprised of just a couple of assets, like a house and maybe a bank account. The exact rules and requirements can vary by state, but many states make simplified probate options available when an estate isn't complicated. The court will allow the transfer of assets to living beneficiaries based on a small estate affidavit in these cases.
This type of "probate" can take as little as a couple of weeks. The total value of the deceased's probate assets must usually fall below a certain dollar limit to qualify.
Full-blown administration can get complicated and drag out if the estate is comprised of a house, a bank account, and an interest in the family business. You can avoid probate of your estate entirely by funding your assets into a living trust. They would pass to living beneficiaries according to the terms stated in your trust formation documents so a probate case never has to be opened with the court.
Of course, this assumes that you remember to title all your property in the trust's name after you form it.
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