Why do some estates take longer to settle?

 

By Attorney Truman Scarborough

 

The length of time it takes to settle an estate depends on: 1] whether the decedent’s records are accessible and organized; 2] the competency and diligence of the administrator; 3] the overall complexity of the estate; 4] whether the estate has to be probated; 5] the type of assets (real estate having the potential of presenting more problems); 6] the nature and extent of creditor claims against the decedent; 7] any difficulties with the decedent’s taxes; 8] whether the heirs have their own financial, marital, or substance abuse problems; 9] whether there is underlying family hostility; and 10] whether someone decides to challenge the Will or Trust in the court.

There are many reasons to bring the administration of an estate to a conclusion as soon as possible. The obvious reasons are to let the beneficiaries enjoy their inheritances and limit expenses (which tend to go up proportionally with the time and work involved). An open estate also allows unforeseen events to complicate and delay settling the estate. Here are three examples:

1] An estate must remain open until all creditor claims are settled. If a car titled in the decedent’s name is in an accident, the estate cannot be closed before resolving the issue of liability.

2] Until the home is sold or transferred to the beneficiaries: it can be difficult to obtain homeowner’s insurance; it will lose the homestead tax exemption; and if unoccupied, it is more likely to be vandalized.

3] If a beneficiary dies before receiving his/her inheritance, a probate estate must be opened to receive the deceased beneficiary’s share. When a beneficiary survives the decedent, his/her interest is vested (locked in) and must be distributed to that individual. The problem is the law does not allow distribution to a deceased individual. Therefore, a probate estate must be opened for the deceased beneficiary to receive the gift. Having to probate the deceased beneficiary’s estate causes delays.

In addition to organizing records and selecting a competent administrator, one way to shorten the time to settle an estate is to avoid probate. When a person dies, no one is empowered to sign the decedent’s name and property just in the decedent’s name without beneficiaries is frozen. A Power of Attorney does not help, since it is effective only while the creator is living. It is similar to an employer – employee relationship. If an employer goes out of business there are no employees. A Will by itself does not transfer property but works through the probate process. Beneficiaries generally do not receive their inheritance until the end of the formal probate process, approximately six months from the time pleadings are first filed with the court.

The Revocable Trust is frequently used to avoid probate. With a Trust, the successor trustee has immediate control of the decedent’s assets. It is like a corporation, where if the president dies his successor immediately takes control. No court authorization is required.

Perhaps, one of the kindest gifts we can leave our heirs is allowing them to have a prompt smooth transfer of assets so they can move on with their lives. With proper planning, the burden on those we ask to settle our affairs can be reduced and beneficiaries can enjoy their inheritance without unnecessary delays.

 

For further information on your estate planning options you may be interested in Attorney Truman Scarborough’s Booklet on Estate Planning in Florida. It is available without charge or obligation by calling (321) 267 – 4770. His office is located at 239 Harrison Street, Titusville, Florida.

 

 

 

 

 

 

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