If you are appointed as the executor or administrator of an estate, one of the most important responsibilities you have is to gather and catalog all of the decedent’s property to be included in his probate estate. A probate estate asset is property the decedent owned not automatically transferred to someone else upon his death due to contract or operation of law. The rules of probate are defined by state law; therefore, standards may vary depending on where the decedent lived.
Probate is a judicial process overseen by a court. It begins shortly after a person dies. If a will exists, the court reviews it to ensure it complies with all drafting requirements established by state law. If the will meets these standards, the court certifies it and appoints the executor named in the will to oversee the estate. If the will is not valid or doesn't exist, the court then appoints a representative to oversee the estate, commonly referred to as the administrator. As an executor or administrator, you are responsible for gathering together all of the decedent's probate assets and using them to pay off any outstanding debts and claims against the estate. After all of the debts and claims are settled, you will either distribute the assets to the beneficiaries as identified in the will or, if there is no will, to the decedent’s heirs as defined by the state’s intestacy code.
Non-probate assets are assets transferred upon the decedent’s death to another entity by contract or operation of law. Examples of non-probate assets by contract include life insurance policies, 401(k)s, pensions and bank accounts payable on death. Examples of non-probate assets by operation of law are property subject to a right of survivorship and property jointly-owned by spouses.
In general, an executor or administrator must inventory the decedent’s probate assets shortly after being appointed. The purpose of taking inventory is to determine what property properly belongs in the estate and its value. The inventory describes assets in “reasonable detail,” including their fair market value as of the day the decedent died and any attached mortgages or other encumbrances. Examples of goods that should be included in the inventory are real estate held in the decedent’s name only, personal bank accounts, household goods and vehicles.
Transfer to Beneficiaries
Once probate assets have been gathered and decedent’s liabilities and debts paid, distribute the remaining probate property to the beneficiaries. Typically, the executor or administrator prepares a final inventory for the probate court along with a petition requesting closure of the estate so the remaining property can be distributed. You must notify all interested parties prior to the probate hearing. The probate court will review the petition, ensure all debts have been paid and then grant an order approving the distribution. You can then transfer assets to the people designated in the decedent’s will or by intestacy rules. To transfer real estate, or similar property, you should record a quitclaim deed in the recorder’s office of the county where the property is located. A quitclaim deed releases the estate from any interest in the transferred property and surrenders all ownership rights to the beneficiary.