This was originally published on Monday, May 16 ,2016 in the Pacific Daily News. Click here to subscribe to the PDN.
When a love one passes, often the estate or assets of the deceased come into question on how it will be divided. Even though the deceased left a valid will explaining how the estate is to be divided, the will must go through the probate process. That process ensures that everyone, including the creditors are satisfied. The probate process is especially needed when the deceased has a partial will or no will at all. In some cases the process is held in a probate court administrated by the state. Creditors and heirs are notified of an upcoming hearing. The estate is inventoried and a judge decides how the estate is distributed. Otherwise, a probate can be opened by a family member.
The executor is the person appointed in a will be the representative. If you die without a will, the court may appoint someone for you. Be sure that the person you appoint is someone who will represent your wishes as you wanted them. You should also decide who would be your alternate if for some reason your primary choice is incapable of carrying out your wishes.
The person who is appointed as your executor receives Letters of Administration or Letters of Testimony. These documents are given once he or she takes an oath of office. The executor then files for a Petition for Probate and Will and the court acknowledges that the will is valid.
The executor then inventories all your real and personal property and the value of your estate is calculated.
When distributing the estate, sometimes there is not enough to cover the debt. The cost of the court feesmedical and funeral expenses, taxes and debt are all claimed against the estate. After the creditors are satisfied, the remainder of the estate is then passed along to the beneficiaries according to the will. Sometimes if the debt is so large the beneficiaries may not get anything at all.
Some probates are straightforward and others can get complicated. To make matters more convoluted, not all of your estate may go through probate. If you own property jointly or are named as a beneficiary in a life insurance policy, those assets may be exempt from going through probate. Another condition that could make probate complicated would be if the deceased owns property in another state or country.
It is best to seek professional help from a probate lawyer since the laws are so complex. It may cost a little more but it will be worth having someone to help ease the stress of an already stressful situation.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at firstname.lastname@example.org and read past columns at the Money Matters blog at http://www.moneymattersguam.wordpress.com.