April 2022




Friday, April 8th, 2022
by William Erhart
Probate is the legal process for authenticating a deceased person's will, reviewing their assets, paying their outstanding debts and taxes, and distributing what remains to their heirs. Upon someone's death, the court will appoint an executor of a valid will to administer the probate process. When there is no will, the court will appoint a state administrator to handle probate. Probate law varies from state to state, but there are some steps that are universal.

First, an executor is appointed and is normally the person named in the will. It is the executor's responsibility to initiate the probate process. An executor can be a family member, a financial advisor, or any person the testator deemed capable of administering their estate. The executor files the will with the probate court, which initiates the probate process. A court officially appoints the executor as named in the will, giving the executor legal authority to act on the testator's behalf.

The executor's function is to locate and oversee all of the estate's assets and to determine each asset’s value. The majority of the deceased's assets are subject to probate court, where the deceased lived at the time of their death. Real estate is an exception, and probate may extend to any county where the real estate is located. 

The executor will pay any taxes and debts owed by the deceased from the estate. A notice of death is published, and creditors are given a limited time to make claims against the estate for any money owed to them. If the executor rejects the claim, the creditor may take them to court, where a probate judge will determine the debt's validity. The executor is responsible for filing the deceased's final, personal income tax returns. The executor's last task, via court authorization, is to distribute what remains of the estate to the beneficiaries.

Probate is required for any asset or account that does not have a joint owner or beneficiary named. If a joint owner or beneficiary is named, then the title changes automatically, and probate becomes unnecessary. 

If a person dies without a will, they are said to have died intestate. An estate can also be deemed instate if the will presented to the court is found to be invalid. The decedent's assets of an intestate estate follow a similar probate process, beginning with the appointment of an administrator. An administrator functions like an executor, receiving all legal claims against the estate, paying outstanding debts, and the decedent's taxes. 

Administrators must also seek out legal heirs, including surviving spouses, parents, and children. The probate court will determine the distribution of the estate among its legal heirs. In the absence of any family or other heirs, the remaining assets go to the state. 
The more complex or contested an estate is, the longer the probate process can take to finalize. The longer the process, the higher the cost. Probate without a will typically costs more than probate with a valid will, but neither scenario is inexpensive. Probate court files an estate's assets as a matter of public record, so if you want to keep your estate private, it is best to pursue other estate planning options such as a trust.  

As estate planning attorneys, we can help you determine what planning tools are best for you. For more information and further inquiries about your personal situation, please contact our office at 302.651.0113.


From elderlawanswers.com
April 12, 2022

If your spouse dies, you may have to decide whether or when to sell your house. There are some tax considerations that go into that decision. 
The biggest concern when selling property is capital gains taxes. A capital gain is the difference between the "basis" in property and its selling price. The basis is usually the purchase price of property. So, if you purchased a house for $250,000 and sold it for $450,000 you would have $200,000 of gain ($450,000 - $250,000 = $200,000).

Couples who are married and file taxes jointly can sell their main residence and exclude up to $500,000 of the gain from the sale from their gross income. Single individuals can exclude only $250,000. Surviving spouses get the full $500,000 exclusion if they sell their house within two years of the date of the spouse's death, and if other ownership and use requirements have been met. The result is that widows or widowers who sell within two years may not have to pay any capital gains tax on the sale of the home.
If it has been more than two years after the spouse’s death, the surviving spouse can exclude only $250,000 of capital gains. However, the surviving spouse does not automatically owe taxes on the rest of any gain. 

When a property owner dies, the cost basis of the property is "stepped up." This means the current value of the property becomes the basis. When a joint owner dies, half of the value of the property is stepped up. For example, suppose a husband and wife buy property for $200,000, and then the husband dies when the property has a fair market value of $300,000. The new cost basis of the property for the wife will be $250,000 ($100,000 for the wife's original 50 percent interest and $150,000 for the other half passed to her at the husband's death). In community property states, where property acquired during marriage is the community property of both spouses, the property’s entire basis is stepped up when one spouse dies. 

To understand the tax consequences of selling property after the death of a spouse, contact your attorney.

.
Friday, April 15th - The office will be closed in observance of Good Friday.
Meet Courtney D. Mason

Courtney joined Estate & Elder Law Services in December 2021 and has many years of customer service experience. As the Administration Assistant, Courtney handles various activities that are essential in daily operations. She organizes documents, works with third-party vendors, drafts required forms, and helps clients address general inquiries. She also performs a variety of clerical tasks for the team including assisting with the telephones, scheduling consultations, word processing, organizing files, making copies, scanning, and helping with other firm projects.
 
After high school, Courtney earned an associate degree in Criminal Justice. She is currently continuing her education at Widner University pursuing a Bachelor of Science in Law. Courtney aspires to establish a career as a paralegal in the future.
 
Courtney has a daughter and is a native of Delaware. In her free time, she enjoys spending time with her daughter at the arcade as well as traveling with her family.