Probate is a legal process used to settle an estate. It includes determining whether the will is valid, notifying potential beneficiaries and creditors, making an inventory of the estate, paying any debts from the estate, and distributing the assets. The assets are distributed from an estate only after the bills have been paid and an inventory made. Some states require that the surviving family have a year stipend provided before creditors or beneficiaries are given a disposition of assets.
Managing the Estate's Assets
The estate's executor, or personal representative, is responsible for managing the assets of the estate, according to the American Bar Association. Managing the assets includes making an inventory and having real estate and other valuables appraised. In most states, the executor is required to give beneficiaries a copy of the inventory as well as filing a copy with the probate court. The assets cannot be distributed until the inventory is complete.
Read More: What Is the Meaning of "Executor of an Estate"?
All U.S. state probate laws require certain creditors be paid before the estate's assets are distributed. Common bills that the estate must pay include the medical bills from the deceased person's last illness and the deceased's funeral and burial expenses, according to the American Bar Association. As part of paying the estate's debts, the executor must notify the estate's creditors. Creditors have a certain amount of time under most state laws to answer the executor. The assets cannot be distributed until this time period is up.
Occasionally, a beneficiary or other interested party may decide to file a will contest with the probate court to challenge the validity of the will. When a will contest is filed, the executor has the responsibility to defend the will's validity and may pay for an attorney's assistance from the estate's assets, according to the American Bar Association. As long as the validity of the will is in dispute, the assets of the estate will not be distributed because the outcome of the will contest may change who receives which assets.
Any assets covered by the will must wait until the bills are paid and will contests are settled before they are distributed from the probate estate. However, some assets may pass outside probate. These assets are known as nonprobate assets. They include items like joint bank accounts, real estate held in a joint tenancy and life insurance policies that name specific beneficiaries instead of the estate. Because the probate court does not have power over these assets, they may be distributed before the probate estate is settled, according to the American Bar Association.
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