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Understanding Probate

When someone passes on, many things have to be done to clear up that person's affairs. Title of all assets that were held by the deceased must be officially transferred to the heirs and beneficiaries. If the value of the assets in the estate exceeds a certain amount (this amount changes depending on the year), then the estate will probably have to pay taxes that are imposed by the U.S. government (approximately 37% - 55%) and most states (this percentage varies depending on the state) on the transfer of property from a decedent to his or her heirs or beneficiaries.

The formal court process of handling someone's estate in order to transfer title and pay the taxes is called Probate.

Rules of probate have been established in all fifty states to supervise the transfer of legal title to property from a decedent to his heirs or beneficiaries, and to supervise the management of the property and affairs of one incapable of handling his or her own affairs. Depending on the state, a series of procedures must be completed, such as court accountings, inventories list with asset valuations, as well as specific forms must be filed within a predetermined time frame in order to complete the probate process.

If the deceased did not appoint an executor to do this job, or where the appointed executor is unable or unwilling to serve, the Probate Court will formally appoint an administrator to manage the probate of the estate.

If it is a taxable estate, then various returns must be filed on behalf of the estate. Specific tax minimizing strategies must be applied when distributing assets to the beneficiaries in order to minimize taxes. Special time-sensitive elections must be considered and selected wherever applicable and appropriate in order to minimize taxes.

Whether someone dies with a will or without a will, our office can help you administer an estate properly. Our seasoned tax experts can assist you with preparing the estate tax return, the estate income tax returns, the beneficiaries' income tax returns, the accountings and valuations, etc. Our attorney affiliates can assist you with interpreting the will should any questions or concerns arise.

If you have any additional questions or concerns about estate administration, or if would like to schedule an estate administration appointment with our principal tax strategist, please call our office any time. All initial consultations are complimentary.

Frequently Asked Questions

1. What Do You Do When Someone Dies Without A Will?

2. Does a Spouse have to Accept a Will?

3. What is Included in the Estate of the Decedent?

4. What Should Be Done With a Will?

5. What are the Responsibilities of an Executor (or an Administrator)?

6. What is a Bond?

7. What are Sureties?

8. What Happens If the Executor (Or Administrator) Steals from the Estate?

9. Who Can Contest a Will and Why?

10. What is An Accounting?

11. Do I Have to File An Estate Tax Return?

12. How Long Does Probate Take?

We assist beneficiaries in planning for their future as well as for future generations.

What Do You Do When Someone Dies Without A Will?

In all states and in the District of Columbia, the estate would first go to the decedent's spouse and children. However, if a person dies with no spouse or children, the estate would then go to the closest relatives. If a person dies with no relatives, the estate goes to the state.

An estate may still need to be probated even if the decedent did not leave a will. Depending on the size of the estate, tax returns for the estate and the beneficiaries may still need to be filed; the Inventories and Court Accountings in addition to other requirements unique to each state may still need to be prepared.

The person closest to the decedent that wishes to undertake handling the estate may apply to the probate court to be an administrator or administratrix. An administrator is a male who handles the estate of a person without a will and an administratrix is a female who handles the estate of a person who dies without a will. Dying without a will is legally referred to as dying intestate. The person's estate is distributed according to the state laws.

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Does a Spouse have to Accept a Will?

If a spouse has been left out of a will, or if the spouse has been left a smaller share than they feel they are entitled to, a spouse may waive the will, and ask for their statutory share. Under most states and the District of Columbia Law, the spouses statutory share is one third of the personal and real estate of the decedent if there are children and twenty five thousand dollars plus one half of the personal and real estate of the decedent if their are no children. The spouse must waive the will and elect their statutory share within six months of the probate of the will.

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What is Included in the Estate of the Decedent?

Anything that was in the name of the decedent alone is part of the estate. Interests that pass automatically upon death are not included in an estate. Examples of property not included in the estate are money in a joint bank account payable upon death to the survivor, real estate held in joint tenancy or tenancy by the entirety or life insurance policies which are payable to anyone but the estate.

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What Should Be Done With a Will?

After a person dies, their will must be probated. Probate is the court process of approving the will. This is done by filing the original will with the probate court with a Petition to Allow the Will, a Bond and a certified copy of the death certificate. A typical will names a person to handle the estate and carry out the directions left in the will. This person is called an executor if it is a male, or an executrix if it is a female. The Petition to Allow the Will is also used to approve the person who was named as executor. You should be careful not to lose an original will, because it is the easiest to have allowed by a probate court. I handle probating of wills, and if you want my office to probate the will, bring me the original will, and my office can prepare all the necessary documents to have the will allowed.

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What are the Responsibilities of an Executor (or an Administrator)?

In general, all Executors or Administrators face similar duties and responsibilities, regardless of the size of an estate. All steps in the administration of the estate are more or less directed toward three goals: Collection and management of assets; payment of debts, taxes and expenses; and distribution of the balance of the estate assets to the named beneficiaries.

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What is a Bond?

To probate a will, the executor (or administrator) must file a bond with the court. The bond is that persons promise to carry on his duties in a responsible manner and to handle the distribution of the estate honestly. In other words, if you have been named as an executor, you file a bond to promise to the court and all the heirs that you will distribute the estate to all the named heirs and you will not take the money for yourself.

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What are Sureties?

When a bond is filed, it may be filed without sureties, with personal sureties or with corporate sureties. A surety is another person (or corporation) who will stand by you and state that your promise to handle the estate responsibly and honestly is good. If a will has waived sureties, that means that the decedent trusted the person he named as executor and that the executor needs only his own word to administer the estate. A bond may also be filed with personal sureties, which in most states and the District of Columbia, must be two people who reside and own real estate in Virginia, who are willing to sign the Bond as guarantors of your word. If you cannot find two such people to act as sureties, a corporate surety may be purchased to guarantee the word of the executor.

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What Happens If the Executor (Or Administrator) Steals from the Estate?

When a bond is filed by an executor, a penal sum is part of the bond. The penal sum is based on the value of the estate. If the executor steals from the estate, he will be liable for the sum of the penal bond. If he cannot pay that sum, the personal or corporate surety on the bond must pay the penal sum.

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Who Can Contest a Will and Why?

Only a person who is an heir-at-law may contest a will (That is someone who would inherit by state laws or a will). A will may be contested for a technical error such as lack of two impartial witnesses or the lack of a signature. In most states and the District of Columbia, even an "X" made by the testator in the presence of two witnesses may be valid.

Other reasons that a will may be contested is the competency of the testator, Duress, Fraud or Mistake. If someone objecting to the Will can show that the testator was incompetent when they signed the will or that the will was signed under duress or due to fraud or mistake, the will may be declared invalid.

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What is An Accounting?

After a person is approved as an executor or an administrator, he must file an accounting. The accounting is a formal schedule of all of the assets of the decedent. Subsequent accountings must be filed to show how these assets were distributed.

Do I Have to File An Estate Tax Return?

If the estate of the decedent is over six hundred thousand dollars, both state and federal estate tax returns must be filed within nine months from the date of death. If the estate of the decedent is less than six hundred thousand dollars, an estate tax return should be filed for most states and the District of Columbia if the decedent owned real property. The reason for this is that most states and the District of Columbia has an Estate Tax Lien against all real estate that has passed by inheritance. The only way to get a Release of the Mass Estate Tax Lien is to file the estate tax return and either show that no estate tax is due, or pay the estate tax that is due. If the Estate Tax Lien is not released and the release is not recorded with the Registry of Deeds, it will affect the title of the property that will prevent future sales or refinances of the real estate. My office routinely handles estate tax returns and the filing of estate tax lien releases.

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How Long Does Probate Take?

Probate can take years, depending on the complexity of the estate. An estate should be open for a year, to insure no claims against the estate are missed. Creditors have one year from the date of death to file a claim against the estate or they are barred from doing so. Liquidating estate assets may take a substantial amount of time. If the will is contested or objections are filed, these actions can also delay the final closing of the estate. To close an estate a Final Accounting is filed with the Court which shows all the assets of the estate and how they were distributed. When the final accounting is approved by all the heirs and the court, the probate of the estate is officially finished.

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