Dealing With a Deceased Person’s Funds and Property: 7 Things to Know
When someone you love dies, it can be an extremely difficult and emotionally charged time. Not only are you grieving the loss of a person close to you, but you may also be responsible for dealing with their financial and property matters. This can be a daunting task, especially if you are not familiar with the legal process of probate.
We will look at probate bonds, and break down executor and administrator bonds, as well as guardianship and conservator bonds. Moreover, we will discuss how the size of the estate or disputes over the estate can change things. We will also touch on the death tax, and finally, we will remind you that family is the most important thing.
1. Probate Bonds and Costs
A probate bond is a type of surety bond that is required in order to administer a deceased person’s estate. The purpose of the bond is to protect the interests of the estate’s beneficiaries by ensuring that the executor or administrator properly handles and distributes the estate’s finances.
As you can imagine, this is well worth paying for. If you are wondering about probate bond cost and premiums, there is a lot of information online to explain these factors in more detail. To summarize, a probate bond will cost between 1% and 2% of the bond penalty every year that the bond is in place. The bond premium will be due each year until the paperwork is received.
2. Executor Bonds and Administrator Bonds
Executors of a will are appointed by the estate and they are also referred to as personal representatives. Administrators are appointed by the court. Both roles involve distributing the assets of the estate equally among beneficiaries.
An executor bond also called a fiduciary bond, is a type of surety bond that guarantees the performance of an executor of a will. Similarly, an administrator bond guarantees the performance of the administrator of the estate. If either the executor or administrator mishandles estate funds, the beneficiaries can make a claim against the bonds.
3. Guardianship or Conservator Bonds
In some cases, when the assets of the estate are held for the benefit of a minor or person who may be incapacitated, the court may appoint a guardian or conservator to manage the deceased person’s finances and property.
The guardian or conservator is responsible for ensuring that the estate is properly managed and that the deceased person’s debts are paid. They may also be responsible for distributing the estate’s assets to the beneficiaries. If you need to get a proper estimate of the property’s value, you can hire an expert to help you, however, make sure they are RICS certified before you start. The guardian handles these responsibilities until the minor is an adult, or until the incapacitated person is deemed ok to do so.
4. Size of the Estate
The size of the estate will make a difference in how long the process of dividing assets will take. Larger Estates present more opportunities for error, disputes and miscalculations. They also have the possibility to have larger opportunities for fraud and deceit among beneficiaries. Hopefully, this is not the case for you. However, expect the process to take longer if your deceased loved one had a large estate.
5. Death Tax
The size of the estate will also determine the amount of federal estate tax that needs to be paid. The tax is split into brackets, with the lowest being 18% and the highest sitting at 40%. Some states impose a death tax on top of the federal estate tax.
6. Disputes Over Assets
Disputes over assets can occur when more than one beneficiary wants to keep a property, for instance, or if a property is split between them and one party must buy the other party out of ownership. This is one of many reasons disputes may occur. They will slow the process of dividing the assets and are always best avoided.
7. Family is the Most Important Thing
Finally, try to remember during this turbulent time that your remaining family is your safety net and support system. You may have disputes and there may be tension in the air as you have all suffered a loss and want to do the right thing. However, it is important to remember that your deceased loved one would want you to get along and that you should not waste precious time being upset with one another.
This has been a brief guide to 7 things you should know when a loved one has passed away and it comes time to split their assets among the will beneficiaries. We have looked at probate bonds, their costs, and the roles of the administrator and executor.
Moreover, we have seen that if the beneficiaries are minors or incapacitated, a guardian will be appointed by the court to oversee the proceedings. What’s more, we have discussed how the size of the estate can impact the process of dividing assets and the death tax amount. Try to avoid disputes at all costs.
