When you engage in estate planning and set up a will to determine what happens to your assets, you must choose an executor to oversee the process. If you do not choose an executor before you die, an administrator must be appointed by the local probate court after you die.
When you create a will without naming an executor or you do not create a will at all, your assets will be handled by the local probate court. The probate court will appoint someone to act as the administrator of your estate. This individual could be a family member or friend. In some cases, the court may appoint someone that is not close to the deceased, such as a lawyer or another professional. The court then gives the administrator powers to start the distribution process of the estate.
It is up to the administrator of the estate to handle the distribution process of the assets. The administrator has to be fair and must divide the assets according to the will or according to what the probate court commands. The administrator is not allowed to get involved in any self-dealing, which would help them in any way. The administrator may need to contact the beneficiaries of the estate to let them know what is going on.
Collect and Inventory
Once the administrator has been appointed, it is up to him to collect all of the assets of the deceased. This could include transferring assets from investment accounts and other accounts into a single estate bank account. The administrator also has to inventory every asset that was part of the estate. During the probate process, any creditors of the estate can also put a claim in to be repaid for the amount that they are owed.
Payments and Distributions
After the administrator has determined what assets are in the estate, he can begin making payments and distributions. The administrator has to pay all of the debts of the deceased before anything else can be distributed. This includes tax debts and personal debts, such as a mortgage or credit cards. Then, after the debts are paid, the administrator can make distributions to the beneficiaries of the estate. These distributions could be in the form of cash or in the form of physical property.