In general, heirs and beneficiaries have a passive role during probate. However, they should keep themselves updated on the status of the estate and any decisions made about asset distribution.
Every probate is different – there are various heirs, issues and assets – but there are some things that all of them should consider. This information may help them avoid mistakes, delays or unnecessary costs. Learn more about probating an estate in Georgia.
The Personal Representative
After losing a loved one, there are many things that need to be taken care of. These include funeral expenses, costs of probate proceedings and paying debts and taxes. A good Georgia probate attorney can help you through the process as smoothly as possible.
Once a personal representative has been appointed by the court, they can begin to gather the deceased person’s assets and pay any necessary expenses. This process can take up to a year or more depending on the complexity of the estate.
Once all debts, expenses and taxes are paid, the remaining assets can be distributed to heirs or beneficiaries. It’s important that the personal representative follows the wishes of the deceased person if there is a will or the intestacy laws of Georgia if there is no will. The personal representative must also keep heirs and beneficiaries informed about the case’s progress. They must file reports and an inventory of all assets with the probate court.
Creditors
Probate gives someone, often a surviving spouse or close relative, authority to gather the departed individual’s personal property, pay financial obligations, estate tax and other taxes, and ultimately distribute assets to individuals who will inherit them. The first thing that has to happen is for a court to appoint an executor or administrator. That person can be an individual named in a will or, if there is no will, the heirs at law have to agree on one.
Once an executor or administrator gets appointed, Georgia law puts a six-month hold on creditors. This freezes payments with the exception of mortgage and vehicle loans, which continue to be paid because failing to do so could lead to foreclosure or repossession respectively.
Some property and accounts avoid probate altogether by naming a beneficiary outside the will, such as a revocable trust, real estate held as joint tenants with a right of survivorship or bank accounts with payable on death or transfer on death designations. However, even these methods may not prevent the need for probate in every case.
Heirs
The heirs to the estate will be notified and will need to come forward to make their claims. Heirs in Georgia can be compelled to file their claim within four months of the date on the Letters Testamentary or letters of administration.
Heirs can be a source of dispute in an estate, especially if they disagree on how assets should be distributed. Fortunately, probate is an opportunity to resolve any disagreements that might arise among beneficiaries.
It is important to note that the legal representative of an estate can only distribute assets once debts are paid. The debts must be paid in the following order: surviving spouse and children (up to a year’s worth of support), funeral expenses, estate tax, and other debts.
Those who wish to skip probate can do so by placing all assets in a revocable trust, and naming beneficiaries outside the will. Some assets such as retirement accounts and vehicles can also be designated with payable on death or transfer on death options that will avoid probate altogether.
Taxes
While Georgia does not have its own estate or inheritance taxes, beneficiaries must pay federal taxes on the money they receive from a deceased loved one’s estate. There are ways to legally and painlessly minimize these taxes.
For example, property in a Revocable Trust, real estate held as Joint Tenants with Right of Survivorship, life insurance policies and retirement accounts with designated beneficiaries, and bank accounts with Payable on Death or Transfer on Death (TOD) clauses typically avoid probate. However, heirs may have to pay income tax on certain inherited retirement accounts depending on their individual financial situation.
At the end of the probate process, the personal representative files a discharge petition with the court. This legal document requests the court to release them from their duties as executor or administrator of the estate. The discharge petition typically goes with an inventory of assets, a list of all disbursements and payments made from the estate, and proof that all creditors have been paid.
