If you are planning to settle an estate, there are four important steps you should follow. These are: determining the assets, preparing the financial statements, implementing the plan, and making others aware of the plan. In addition to drafting a will and a comprehensive estate plan, you will need to consider how to notify beneficiaries and how to deal with creditors. You may want to contact an attorney at this time to ensure that your plans are in order.
Identifying the assets of the deceased is the first step. The inventory will list the items owned by the decedent and the heirs. This includes valuables such as jewelry, art, antiques, and television sets. It also determines if the estate will have to pay estate tax. Once the property is listed, the administrator must file an inventory with the court within 90 days.
Once the estate has been inventoried, the administrator will need to decide how to handle the debts and taxes owed to the estate. He or she will need to pay any legitimate bills and pay the taxes owed. During this process, the administrator will need to contact the professionals who worked with the decedent.
Depending on the state, the process of handling the estate can be complicated. A court-appointed attorney will often oversee the case. They will also determine who inherits the estate. Often, this process will involve a trial. During this time, witnesses will testify.
Estate administration can involve selling assets to pay legal costs. In this situation, the executor will need to be sure to keep the property safe and insured. Often, real estate is sold to increase the amount of the estate’s value.
The executor will need to hire an appraiser and prepare an annual inventory of the decedent’s assets. Once the administrator has completed these tasks, the court will approve the inventory. Afterward, the administrator must notify the estate’s beneficiaries. Finally, the administrator will have to file a final report with the court.
During the administration, the executor will have to pay taxes, funeral expenses, and debts owed to the estate. The executor should also establish a bank account for the estate. Having a financial account in place will allow the executor to easily transfer money to the beneficiary when necessary. Usually, a bank account will have a “transfer on death” clause, which allows the account to be transferred when the owner passes away.
After the estate has been settled, the executor must file a final income tax return. An income tax return will have to be filed before any estate tax can be paid. Eventually, the executor will be released from his or her duties.
After the estate is settled, the administrator will need to set up an estate account to hold funds for the estate. If the assets are not included in the will, the administrator will need to sell the property to pay any outstanding debts. Before the executor can distribute the assets, he or she will need to file a petition with the court for approval.