After someone dies, their estate needs to be dealt with. This includes paying their debts and taxes, and distributing their money and property to those who are entitled to it.
If you owe money to someone who died, it’s best to contact the probate court in the county where she lived to find out whether the estate is being probated and whether a claim form is available.
Distribution of Assets
After a person dies, their estate includes their possessions (like jewelry and clothing), any money in bank accounts and any property they owned. These can include real estate and proceeds from insurance policies.
After the person has died, any creditors that feel they are owed money or property by the deceased can file a claim against the estate. These claims can be for a number of different types of debts, including mortgages, credit card debt, loans and unpaid wages.
The executor or administrator of the deceased’s estate is responsible for resolving these debts before they can distribute the remaining assets to heirs. This process is known as probate.
The first step in resolving any debts is to contact all creditors and beneficiaries. This may include mail, email and telephone calls.
Distribution of Debts
A person who dies has money and property (an ‘estate’) that they need to deal with. Their ‘executor’ or ‘administrator’ must pay any debts and taxes that they owe and distribute their assets to the people who are entitled to them.
Almost everyone leaves behind some debt in their estate – usually mortgage or credit card bills, medical costs and funeral expenses. These debts have priority over any inheritances a decedent might leave to their heirs, but every state has specific rules on how these should be handled.
Before paying off any debts in a deceased estate, the executor or administrator must advertise in a local newspaper once a week for two weeks to let creditors know of the death and their rights. This helps to protect the estate from any future claims by creditors who might be unaware that the deceased died.
Distribution of Real Estate
In a deceased estate, the personal representative or executor must secure and manage real estate, as well as pay off any debts of the decedent. They must also take inventory of the estate to determine its worth.
The executor or personal representative may decide to sell a property or other real estate to recover costs. This can be a lengthy process that may require court approval.
Depending on state law, some real estate can pass directly to the heirs at law upon the decedent’s death. However, in other cases, the personal representative or executor must obtain court approval for the sale of a property before selling it to heirs at law.
Payments from the estate, whether for distribution to heirs at law or a beneficiary, must be proven by a cancelled check (front and back), a receipt signed by the person receiving the property acknowledging it, and a statement that the specific amount or item was received, which statement must be notarized.
Distribution of Personal Property
There can be a lot of disagreement in family circles about which items should go to which person. A person who dies with no specific instructions for asset distribution can leave the estate a mess.
To avoid this confusion, it is a good idea to prepare a list of personal property and describe in detail who should get each item. This can be done in a letter or written instructions to the executor of the estate.
Another way to avoid a dispute is to auction off certain possessions and divide the proceeds fairly among all the heirs. This method is often very effective and will help the heirs maintain their relationships.
It may also be helpful to determine which items are the most sentimental and sell them for cash. This can be a good option for certain items like art or valuable collections.