Although it is a process that goes on every day, administering an estate is not something that most of us have experience doing.
The first step is to locate the will of the person who has died. The assets it will control through this legal distribution process are known as probate assets.
The will should include the name(s) of those persons or institutions that will have the authority to handle the probate administration. Such an individual or entity is the executor (or executrix).
A trust document may also be available and will govern the how those assets will be distributed.
If no valid will or trust can be found, West Virginia intestacy laws will control how the probate estate property will be distributed.
The person or institution handling the estate administration when there is no valid will is an administrator (or administratrix).
With or without a will, some assets will be controlled solely by contractual arrangements, such as life insurance, retirement accounts, jointly held property and assets owned by a trust. If a trust is part of the estate plan, the person or entity which will handle the trust is the trustee.
Often the beneficiary of insurance and retirement funds is the estate. In that case, the proceeds will be probate assets and will be governed by the will's terms. If a person or nonprofit organization is the beneficiary, the proceeds will not be included in the probate assets.
Generically, executors and administrators are referred to as personal representatives.
If a will is available, it must be taken to the courthouse in the county where the decedent was a resident. At that point, the probate process, which gives legal effect to the will's provisions, will begin.
Even if no will is found, the person who will qualify to become the personal representative must go to the courthouse to start the process.
An oath of office is required by state law. A surety bond also may need to be purchased by the personal representative, using funds from the estate, to protect the estate's creditors and heirs, unless this requirement has been waived by the terms of the will.
Among the first tasks is the requirement to complete the West Virginia estate appraisement form within the following 90 days.
All of the assets owned by the person on the date of death will be included in the estate. The estate's assets will be divided into two categories: probate (controlled by the will) and non-probate (not controlled by the will) assets.
A "date of death" value must be placed on all assets for official purposes.
A federal estate tax return will be required for a person who dies during 2013 when the gross assets of the estate are $5,250,000 or more (spouses have a combined $10.5 million federal estate tax exemption during 2013 if both die during that year). An alternative valuation date of six months after the date of death may be used for the federal return.
In the next column we'll review other responsibilities imposed on a personal representative so that your familiarity with them can allow you to make a beneficial choice for your own estate.
That's good planning.
Deborah Miller is the director of planned giving for the WVU Foundation.