You have been left an inheritance. Congratulations -- but don't start running up the credit cards quite yet. It might be a while before the executor distributes assets from the will. Even a fairly straightforward estate can take a year to go through probate. If the estate has issues or the will is contested, all bets are off. In some states, such as Texas, the executor has up to three years to distribute assets after probate begins.
Although the procedure varies from state to state, generally the executor named in the will must bring the original will to the probate court in the county in which the deceased lived, along with a certified copy of the death certificate. The executor submits a probate petition and pays any required fees. The court then formally appoints the executor and issues letters testamentary, which allows the executor to begin estate administration.
The executor has many duties and responsibilities. These include putting a notice to the deceased's creditors in the local paper, notifying the beneficiaries of the individual's death and the probate proceeding and hiring any necessary professionals. These might include an attorney, accountant and appraiser. She must collect and identify all of the assets owned solely by the deceased, establishing the fair-market value of each at the time of death. These assets constitute the estate. The executor must pay the deceased's creditors out of the estate assets, as well as any ongoing bills such as property taxes on a house. She must also file the deceased's final income taxes, paying any taxes due from the estate account, as well as filing and paying any estate taxes.
The more complicated the estate, the longer it might take the executor to distribute the assets. Complications can arise if the will is challenged. Usually, any challenger has a limited period in which to file a challenge with the court. If the deceased did not keep good records, it could take time for the executor to track down all the estate's assets. If the deceased owed back taxes, the IRS and associated penalties come into the mix.
When the executor has paid off the debts, filed the taxes and sold any property needed to pay bills, he can submit a final estate accounting to the probate court. Once the probate court approves the accounting, he can distribute assets to you and other beneficiaries according to the terms of the will. The executor, who might also be an heir and family member, should keep beneficiaries up-to-date on the probate status. If a significant amount of time passes, and there has been no distribution, you can file a request for accounting with the court. If you think the executor is not performing his duties, you can petition the court for executor replacement if you're an "interested party" -- a beneficiary named in the will.
If the executor can't completely distribute assets within a reasonable time frame, the law might allow partial distributions, especially if these items don't have to be sold to pay estate debts. For example, if grandma specifically left you her good china in the will, you probably don't have to wait until the entire estate is distributed to get the dishes. However, if her house was her major asset, and it was left to you and your siblings, it might have to be sold to pay debts, but will also need upkeep while on the market, further draining the estate.
- What Is a Revised Mortgage?
- How to Negotiate Cheaper Balance Transfers
- Can You Pay Off Mortgage With Credit Card & Get Points?
- How to Purchase to Build Credit
- Should I Cancel a Credit Card After Paying it Off?
- How to Build Emergency Funds for Paying Off Credit Card Debt
- How to Bring Finances Together Before an Engagement
- Paying My Credit Card a Day Late
- How to Plan Your Finances While Renting an Apartment
- How do I Pay Down Debt Without Credit Counseling?