If you’re an heir to a deceased loved one’s property, you may wonder how long it will take to collect your inheritance money. It may seem simple if your loved one specified who should receive what in their will. Unfortunately for heirs, most estates must go through numerous steps before distributing assets to beneficiaries.
The Inheritance Process
State probate laws govern the inheritance process. Probate is a legal procedure for cataloging a deceased person’s assets, identifying their heirs, paying their debts, and distributing the remaining property to beneficiaries. States have different laws regarding notification requirements, executor compensation, and inheritance taxes, but most probate cases follow the same general steps.
Types of Probate
While most estates must go through probate, not all probate is the same. Many states permit the following probate procedures:
- Formal probate: This type of probate involves the most court involvement. It is also typically more complicated, expensive, and time consuming. States may require formal probate for wills lacking the required witnesses or signatures, decedents who owed a lot of debt, or disputes between the parties.
- Informal probate: Informal probate typically requires less court involvement and no court hearings. This administrative procedure may be appropriate when there is an original will that no one contests.
- Small estates: Many states allow a streamlined probate procedure for estates under a certain value. The amount varies by state but may be as little as $15,000 or as much as $275,000. In some cases, small estates don’t require probate at all.
Exceptions to Probate
Some states allow heirs to collect their inheritance money by completing a small estate affidavit instead of filing for probate.
In addition, many states allow certain assets to transfer ownership without going through probate. Non-probate assets typically include the following:
- Joint property with a right of survivorship, such as real estate or shared bank accounts
- Assets in a revocable living trust
- Property with transfer-on-death or payable-on-death provisions
- Life insurance policies, retirement accounts, and other assets with a named beneficiary
These assets pass directly to their legal beneficiary (or joint owner) upon the owner’s death without probate.
Probate Steps
The probate process typically involves the following steps:
Opening Probate
Probate begins with filing a petition in the local probate court, usually in the county where the decedent lived at the time of their death. The death certificate and will (if there is one) must also be submitted.
Next, the probate court appoints an executor or personal representative to administer the affairs of the estate. If the will names an executor, the court typically approves that person. If not, the court will appoint someone, such as the surviving spouse or an adult child.
Notifying Heirs and Creditors
The executor must notify all beneficiaries of the will. If there is no will, the personal representative will notify the decedent’s loved ones and next of kin. Identifying and locating legal beneficiaries isn’t always easy, especially if there are many heirs or they live out of the state (or the country).
Creditors also have a right to estate assets, which makes notifying them an essential part of probate. State laws may require the personal representative to mail individual letters, publish a notice in a local newspaper, or both. Creditors have a certain time limit for filing claims.
Inventorying the Assets
One of the most important executor responsibilities is collecting and safeguarding the deceased person’s assets. For physical assets, this may involve preventing access to them or moving them to a more secure location. It may also involve locating important documents like bank statements, life insurance policies, vehicle titles, and real estate deeds.
Next, the executor must inventory all the assets, describing, listing, and assigning a value to each. The executor may hire a professional appraiser to help with asset valuation if necessary.
Settling Debts
The executor also needs to identify and pay the decedent’s debts. They may use documentation such as utility bills, credit card statements, and medical invoices.
Before the property can go to heirs, the executor must pay all valid debts from the estate funds. This includes creditor claims, court costs, attorney fees, and other outstanding debts. The executor must also file taxes for the estate, final income tax returns for the decedent, and inheritance tax returns where applicable.
If needed, the executor can sell off estate assets for debt payment.
Distributing Property
The final step in probate is distributing the remaining assets to the legal beneficiaries. If there is a valid will, these are the people named in the will. If there is no will, the property goes to the decedent’s closest relatives following state laws of intestate succession.
The executor may transfer the titles of real estate, vehicles, or other assets to beneficiaries. Sometimes, the heirs want the inheritance money but not the physical property. In this case, the executor can liquidate the asset. For example, if no one wants the decedent’s home, the executor will sell it and give the proceeds to the beneficiaries.
The Probate Timeline
It may take several months to several years before you see your inheritance. The timeline depends on the following factors:
- The degree of estate planning: Probate may take longer to sort out when there is no will or the will is unclear or incomplete.
- The size of the estate: Vast assets can be more difficult to collect, inventory, and secure. The type of asset also plays a role, as unusual property like artwork or collectibles may require a professional appraisal.
- The location of the assets: Hidden or out-of-state assets may take longer to identify and gather.
- Agreement among heirs: If beneficiaries question the will’s validity or dispute inheritance rights, probate could take longer to conclude. Having multiple heirs or heirs who live far away can also extend the timeline.
- The performance of the executor: The skill, experience, and diligence of the estate administrator can also affect how long probate takes.
Can I Receive My Inheritance Money Sooner?
The distribution of funds is the last part of the probate process. You may consider seeking a cash advance on your pending inheritance to receive money sooner. For more information, call Rockpoint Probate Funding at (323) 484-1063.
