Ways to Settle an Estate

By Chris Blank

You've lost a loved one, and you're still dealing with the emotional impact. Unfortunately, that's not all you have to deal with. Unless the deceased had no possessions or debts, the final affairs of the estate must be settled. How that happens depends on what arrangements he made in advance, if any. Prior arrangements to handle estates may be made with an attorney, independently, or by using an online document service.

Estate Definition

In plain English, an estate is what you leave behind after you die. That includes a house or a car, of course, plus valuables like jewelry and museum quality artwork. But your estate also includes your clothes, books, household furnishings, personal effects and stocks and bonds. In many cases, your estate will include items that hold sentimental value to you or your loved ones, but little or no monetary value.

Wills

Many people use a will to settle their final affairs. A will is a legal document that provides instructions on how to distribute assets from the estate of the deceased. The main responsibility for carrying out the instructions of a will fall to the executor, a person designated by the deceased before death. Besides carrying out the final wishes of the deceased, an executor must file the deceased's final tax returns, pay creditors, locate any assets the deceased person may have accumulated and identify eligible heirs. The executor also submits the will to the court for probate, the procedure that determines whether the will is legally valid.

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Living Trusts

Many people opt for living trusts rather than wills to control the settlement of their estates, to avoid probate and estate taxes and to maintain privacy. Unlike wills, trusts are not submitted to the courts, and are therefore not subject to public inspection. The person who establishes a living trust may administer the trust herself as long as she is mentally competent, which gives her greater control over the distribution of her assets. A "pour-over will" often accompanies a living trust, and directs assets that remain in the possession of the administrator upon her death into the trust. After the administrator dies, a successor trustee named while she was still alive assumes the administration of the trust, and performs many of the duties that an executor handles, including paying the final expenses of the deceased from the assets of the trust.

Dying Intestate

If you don't make arrangements for settling your final affairs before you die, the courts will take over the task. Dying intestate is the legal term for dying without having a will or living trust in place to settle your estate. The probate court will appoint an administrator -- often a family member -- to act in place of an executor or successor trustee. After paying creditors and filing your final tax returns, the court will distribute your remaining assets according to the intestate succession laws in force in your state. These laws vary, but in many cases spouses and surviving offspring receive most or all of the remaining assets.

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What Is the Executor's Responsibility in Regards to Burial Expenses?

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Estate Law on Heirs

The term "heir apparent" is sometimes used to signify the person chosen to succeed the boss in a business, but this distorts the legal meaning. An heir is a person who inherits property after a death if the decedent did not leave a will. In all states, surviving spouses and children top the list.

How Do I End My Obligations From Being the Executor of a Will?

An executor is responsible for carrying out a will's written directions and settling the final affairs of the will's author, or testator. If you were named as the executor of a deceased person's will, you are responsible for the duties and legal obligations of handling his estate. Due to the amount of work involved or other personal circumstances, you might have to resign as executor before or after you're appointed by the probate court.

Do I Have to File a Will Through Probate?

Probate is a court-supervised administration of a will. Although not every estate passes by will, every will passes through probate in order to become effective. The executor -- either named in the will or appointed by the court -- steers the will into and through the probate process, collecting assets, notifying heirs, paying debts and ultimately distributing property.

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