Many people know nothing about probate until the death of a loved one. So, what is probate? How does it work? and is it necessary? In simple terms, it is a legal process that involves validating and distributing a deceased estate as outlined in their will. While probate ensures the appropriate distribution of one’s estate to the rightful beneficiaries, it can be complex. Estate settlement, as reported by Hays Firm, is more complicated. The tasks involved are time-consuming and accompanied by many challenges.
In this article, you will learn common probate challenges and how to navigate them based on insights from probate experts.
While having an estate plan or written will can help simplify probate, challenges often occur, causing delays. Some of the probate challenges you might face are:
- Difficulty locating assets and calculating estate value
This challenge could be because the assets are hidden or located in different locations or states.
- Will contests
Sometimes, beneficiaries challenge the will’s validity if they feel the distribution is unfair or the executor needs to handle their job more appropriately.
- Paying taxes
Estate tax laws are complex and can affect the estate value of your loved one. Business Insider reports estate tax applies to assets worth $12.06 million. However, it is vital to calculate estate tax to ensure the decedent’s assets are exempted instead of assuming the estate is tax-free. Typically, failure to pay estate taxes can result in hefty penalties.
- Creditors’ claims
Creditors might file a claim against the estate for unpaid debts.
All these challenges can delay the probate process and result in costly litigations. Based on a report by Investopedia, probate costs range from 3% to 7% or more of the estate’s value. Ideally, probate costs increase when complications occur. As a result, the estate value will be less, reducing assets and leaving each beneficiary with little to inherit. So, how do you handle challenges? Here are a few tips shared by probate experts.
Understanding the basics of probate is the first step to overcoming the mentioned challenges. Generally, probate entails:
- validating the will
- identifying and valuing assets
- paying outstanding debts and taxes
- distributing assets
When you know what probate entails, overcoming challenges like inventorying and valuing assets becomes easy. In most cases, executors have difficulty identifying and assessing the value of a deceased’s estate because it is large or some of the assets are hidden in other countries or states. But when you know the expectations during probate, you can research hidden estates in advance. These lawyers also recommend hiring professional accountants to determine the value of the assets. Doing so can help prevent delays in asset distribution and emotional distress to involved parties.
Keeping records of the deceased’s assets, taxes, debts, and last testament is crucial for various reasons. First, proper documentation ensures basing the estate distribution on the decedent’s final wishes. Second, clear estate records serve as a guideline for the administrator to meet all the tax obligations. Note that paying taxes owed by the decedent is vital to preventing legal problems with tax authorities.
Finally, proper documentation protects the executor from legal issues or will contests. Generally, when executors have accurate records of the decedent’s estate plan, they can prove the will’s validity. And ensure each beneficiary receives their rightful share of assets as outlined in the will. Also, with proper documentation, one can present the correct files in court when needed.
It is natural to encounter creditors’ claims and disputes over wills or living trusts. When such issues arise, they can complicate probate. Fortunately, you can navigate this challenge by carefully reviewing and addressing claims outside the court. For example, if creditors come claiming for payment. The first thing you should do as an executor is to examine the claims by checking the deceased’s financial records. If the claims are valid, you should pay creditors accordingly to avoid time-consuming court proceedings.
Likewise, when contests against the will or family disputes arise, it is best to resolve the issue out of court. Attorneys at Hays Firm say a resolution is needed when beneficiaries question the validity of a will or disputes among beneficiaries occur. Therefore, sit down with the beneficiaries who feel the deceased’s last testament is invalid or unfair, listen to their claims, and create a lasting solution. Remember, you can always hire an experienced probate lawyer to negotiate on your behalf.
Another challenge people encounter during probate is assessing estate value and paying taxes. The best way to overcome this obstacle is to correctly identify the deceased’s assets and calculate their value. The advantages of evaluating estate value include;
- ensuring proper income tax calculation
- better management of estate finances
- fair distribution of assets to the rightful heirs
Probate is a complicated legal process that presents various challenges. Executors or estate administrators must locate and value estates, settle outstanding debts and taxes, and address family disputes and will contests. Another issue is that it involves navigating complex estate laws, and it can be emotionally challenging. The good news is you can guide probate without hassle if you understand the basics and potential challenges. Then, seek guidance from a legal expert to ensure you handle the deceased’s estate as state laws require.