Unplanned estates can be caught in the web of probate court for months or even years. Without an effective plan, assets are left at risk with someone else deciding their fate; a multitude of factors – from executor to asset type – impact how long this process drags on. Ignoring probate planning may put your legacy and beneficiaries in jeopardy, costing them time and money that could have been avoided through simple preparation.
Estates Having Numerous Beneficiaries
Estates with multiple beneficiaries often require a long, laborious process to ensure that all legal requirements are met. Beneficiaries must be kept abreast of every stage and documents signed by each individual before the estate can be settled through probate. Unfortunately this occasionally results in one or two unresponsive heirs requiring an extra push from their executor to return important paperwork promptly!
Dealing with Beneficiaries Residing Far Away
Estates with beneficiaries dotted across the United States come with plenty of hurdles, and even modern technology can’t make up for lengthy time differences or expensive shipping costs. Probate process delays are often linked to having those special few far away from home – but that doesn’t mean they should be excluded!
Estates Possessing Assets in Multiple States
Navigating a decedent’s estate can become more complex when their assets are located across multiple states. For instance, if the deceased was based in Nevada but also owned property in California and mineral rights in Oklahoma, three distinct probate processes may be needed to ensure all of these possessions are appropriately handled. Dealing with ancillary proceedings typically lengthens overall settlement time as well – something that executors should consider before tackling such matters on their own.
Estates Required to File Federal Estate Tax Returns
Administering an estate that needs to file IRS Form 706, the federal estate tax return, can be a longer process compared to estates that do not require filing such a return. Typically, the IRS will not commence processing an estate’s Form 706 until three to four months have elapsed since the return was filed.
An estate that must file Form 706 cannot conclude its administration until it receives an official, written approval from the Internal Revenue Service. It may take another three to four months for a human agent to review the return. As a result, the probate administration can be in a state of limbo for at least six to eight months while the IRS completes its work.
If the IRS requests additional information or documentation, another two to three months may pass, prolonging the process for up to a year since the initial filing of the return. Additionally, an estate might have to file a state-level estate tax or inheritance tax return, even if it is not necessary to file Form 706 at the federal level, which can further delay the probate process.
Estates Possessing Unique Assets
Probate may be prolonged when estates own difficult-to-value assets, such as rare collectibles or patents. This is due to the estate’s executor and the IRS potentially having different opinions on their value for tax purposes. In addition, if an asset is highly illiquid it can prevent a closure of probate until its sale – with someone from either creditors or beneficiaries being forced to take possession of that undesirable asset instead.
Handling Disputes Among Beneficiaries
When heirs cannot find common ground, the probate process often devolves into a complex and lengthy legal battle. In these cases, one or more of the beneficiaries typically enlist their own attorneys to scrutinize every detail – potentially delaying resolution for years as litigation unfolds to establish will validity.
Managing the Challenges of Multiple Wills
When a decedent leaves behind multiple wills, the conflicting terms can quickly escalate into legal disputes. This could delay the settling of their estate for an extended period and set off a lengthy court battle as each party argues to uphold its preferred will – adding further complications to what is already a difficult time.
Choosing the Wrong Executor
Making the wrong choice of executor can have drastic and prolonged consequences for settling an estate. Those who lack a financial background, are poorly organized or simply overburdened with other commitments may not possess the skillset to effectively manage probate proceedings. Sadly, despite being outside of everyone’s control – this can create delays that leave few solutions in sight.