Estate Administration Basics

We have many questions about what to do when a loved one passes away. One of those questions is about his or her estate; that is, what happens with the assets or debts of the loved one.  That process is called estate administration. The administration of a person’s estate really begins immediately after a person dies. That doesn’t mean you must be in a lawyer’s office the very next day; however, be sure you see an attorney within a week or two after a love one passes away to review the estate and discuss next steps, to include beginning the formal estate administration process. NOTE: There are important date limitations as to filing for an estate, particularly if there is not a will, so you must talk with an attorney within one to two weeks of a loved one passing to preserve certain rights. 

What is Estate Administration?

The estate administration refers to the process of managing and distributing the assets and affairs of a deceased person, known as the decedent. Informally, it begins with the funeral arrangements, ordering multiple death certificates, finding important documents such as burial policy, last will and testament, and life insurance, and handling other matters that must be tended to immediately after a loved one’s death. The formal (legal) process involves settling the person’s financial obligations, ensuring that their assets are properly valued and distributed to the rightful beneficiaries or heirs, and handling any legal and administrative tasks associated with the estate.

The formal estate administration process typically begins with hiring an attorney, filing a petition to probate the estate, and then with the appointment of a personal representative (a/k/a executor), who is responsible for overseeing the administration of the estate. The personal representative may be named in the decedent’s last will and testament or appointed by a court if there is no will or designated personal representative.

The key tasks involved in estate administration

1. Probate: There are different processes and tasks depending on whether the decedent died testate (with a will) or intestate (without a will). If the deceased person had a will, it is usually submitted to probate. “Probate” is a legal process that validates the will and ensures its proper execution; that is, ensuring the decedent’s wishes are carried out. The probate court reviews the will, appoints the personal representative, and provides legal authority to administer the estate.
2. Asset Inventory and Valuation: The personal representative identifies and gathers all the assets owned by the deceased person, such as real estate, bank accounts, investments, and personal belongings. These assets are then appraised (formal or informal) or otherwise valued to determine their worth. This process may be different depending on whether the decedent died testate or intestate. 
3. Debt Settlement: The personal representative notifies creditors the estate is open and of their right to file a claim against the estate, pays off the decedent’s debts and obligations using the assets from the estate. Common debts include mortgages, outstanding loans, credit cards, taxes, and any other liabilities. Discuss with your attorney before paying debts of a decedent. 
4. Distribution of Assets: Once all debts and expenses are settled, the remaining assets are distributed to the beneficiaries or heirs according to the decedent’s will or the laws of intestacy in Alabama if there is no will.
5. Estate Taxes: The personal representative is responsible for filing the necessary tax returns on behalf of the deceased person and the estate. This includes federal estate tax returns as well as income tax returns for the final year of the decedent’s life.
6. Final Accounting and Closing: Once all the tasks are completed, the personal representative can file to close the estate.

Next Step

If a loved one has recently passed away and you need guidance on what to do next, call Tanya at Huntsville Estate Planning Lawyer, LLC or click HERE go to schedule a virtual (Zoom) consultation to talk with Tanya from the comfort of your own home.