Estate administration refers to handling a person’s estate upon their death. That can include collecting all the documents and information related to the estate and managing it by paying debts, ensuring assets are properly distributed, and otherwise carrying out the wishes of the deceased.
It’s important to consider the needs of estate administration when you’re planning your estate. You can take some actions now to help ensure your estate is administered as you want and take some of the burdens off of the person handling your estate. Working with an estate planning attorney proactively can help you safeguard your wishes, protect the interests of your loved ones, and set your estate up for easier administration.
How Long Does Estate Administration Take?
Estate administration typically begins shortly after someone passes away. In most cases, friends and family members focus on honoring their loved one via a funeral or memorial service, and they may take a little time to work through the first waves of grief.
Generally speaking, the assets of the estate aren’t sorted out and distributed to beneficiaries right away, partly because of these important personal steps. However, there may be some short term financial needs, such as paying bills and property taxes that should be attended to.
How long estate administration takes depends on factors that include the size and complexity of the estate, the type of property in the estate, how well the person planned, the number of heirs, and whether there are disagreements among the heirs. Average timelines for estate administration can range from a few months to a few years, though complex cases can span many years.
Whether or not you have to go through probate also affects how long estate administration takes. Probate typically makes the process take longer. In Minnesota, you may be able to avoid probate if the deceased didn’t solely own any real estate and didn’t own personal property worth more than $75,000 total.
What Happens During Estate Administration?
The first steps of estate administration involve a lot of document gathering and document sending. The estate executor (called a “personal representative” in Minnesota), potentially overseeing others who might agree to help, must:
- Gather pertinent documents. This can include the will or trust document, any written instructions left by the deceased, bills, account statements, and lists of contact information for anyone or any organization that needs to know that the person passed away. Someone must also get certified copies of the death certificate for use while managing the estate.
- Send notifications. Banks, insurance companies, the Social Security Administration, medical providers, and other organizations that provided benefits or services to the deceased should be notified of their passing. In some cases, such as with life insurance, this may involve sending a certified death certificate.
- Identify heirs and beneficiaries. The estate executor may have to work to identify and find all the heirs and beneficiaries relevant to an estate. For close-knit families, this may seem easy, but it’s vital to ensure that all people with an interest in the estate are identified before moving forward with probate or distribution of assets.
- Identifying all debts. Before assets can be distributed to heirs, someone has to settle the estate. That involves going through the accounts associated with the estate and finding all outstanding debts. The estate’s assets, including cash and property, can be used to pay off debts. This typically involves a specific process that may require notifying creditors and the IRS, getting an estate tax ID if necessary, conducting inventories, and having the property appraised.
- Selling estate property. In some cases, an estate executor may work to facilitate the sale of estate property. This can happen if the estate doesn’t have enough cash to pay off existing debts; property is liquidated in such cases to pay debts. In other cases, property is sold to convert it to cash that can be split among heirs.
- Distribute property. Once an estate is settled, the final step is to distribute the remaining assets according to the will and any state laws governing the process. Once all assets are distributed, the estate administration process typically comes to a close. If the estate is going through probate, there will be additional steps and documents to file in order to close the estate.
As you can see, a lot may need to happen with estate administration, and the list above is condensed and simplified. The process can include probate court and even legal disputes. Working with an experienced estate planning and probate lawyer can help you prepare your estate for this process or get through it if you’re dealing with an estate as a personal representative.
Who Should You Pick to Handle Your Estate?
You don’t have to pick one of your close relatives to handle your estate, but it is important to choose someone you trust and can rely on. Think about who will be available and willing to handle what can be a large and complex job. You should also pick someone who is comfortable and capable when it comes to paperwork, personal finances, and legal matters.
You can ask an attorney to be your estate executor — or pay a professional executor, accountant, or other person out of your estate for this purpose. However, you shouldn’t ask the attorney who drafted your will or estate planning documents to be the executor because that can be a conflict of interest.
How Can You Plan Ahead to Make Estate Administration Easier?
The best way to make estate administration as seamless as possible and support the loved one or professional you pick for the job is to plan ahead. Start with the basics, which is putting your wishes down in a will or revocable trust document. Working with an estate planning attorney to draft your will or trust can ensure you cover all your bases.
An experienced estate planning attorney can also help you understand whether other types of estate planning tools, including trusts and power of attorney forms, can help. Reach out to Stone Arch Law Offices to schedule a consultation about your estate planning needs to find out how we can help.