Whether unexpected or not, losing a loved one is an emotional time for the bereaved and those closest to them. You have the responsibility of managing their finances and legal issues pertaining to their property as the person in charge of their affairs.
Cary Estate Planning wants to make their estate settlement as simple as possible because we recognize that this is a difficult time for them.
We’ve outlined the steps you should take when paying real estate expenses after death to help lighten your load a little.
This information will help you navigate the complex process of estate administration whether you’re planning ahead of time or dealing with an unexpected death. That way, you can provide your loved one with the respect they deserve and the assurance that their financial matters are handled appropriately.
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Types of Real Estate Expenses
Managing a loved one’s estate after death requires an understanding of the various kinds of real estate expenses.
- These expenses can include:
- Mortgage payments
- Property taxes
- Insurance premiums
- Maintenance fees
Any unpaid maintenance costs for real estate should be deducted from the estate’s assets when handling posthumous real estate expenses. It’s important to make sure you understand how much money is available to cover these expenses because this can be a complex process.
You should also take into account who is responsible for paying these fees if the property was owned jointly or in a trust.
The executor is required to maintain thorough documentation of all costs paid with estate assets. The executor holds the exclusive legal right to access the decedent’s financial records. Beneficiaries, however, are entitled to examine financial estate account records.
To draft a thorough estate plan that addresses these and other concerns beforehand, you need to hire an estate planning attorney. An estate planning attorney will also be a valuable resource in navigating the estate’s settlement if little to no planning was done prior to the decedent’s passing. He or she will be able to discuss which expenses are covered by the beneficiaries and which by the estate. Please see our earlier posts to find out more about the executor’s responsibilities.
Fees. Court costs are associated with filing certain documents, such as a will to begin the probate process, serving notice to creditors, or registering a property transfer with the local register of deeds. In addition, the executor is qualified to get payment for their services.
This is dependent upon the manner in which the estate was constituted and whether the individual’s will or trust contains any unique clauses. Generally, expect to pay:
Final expenses. Funeral and burial expenses are included in the estate expenses unless the deceased has paid for all of them in advance. They are frequently paid from the death benefit linked to the life insurance policy of the departed individual.
Freehold Estates | Real Estate Exam Prep Concepts
FAQ
Can you write off estate expenses?
What types of assets should be used to pay any estate expenses?
Can you pay yourself back from an estate account?
What are tax-deductible estate expenses?
Here’s what you need to know about tax-deductible estate expenses. When a taxpayer passes away, there are specific tax credits and deductions that must be reported in their last income tax return. This includes credits for taxes paid before death, refundable tax credits, losses from prior years, and capital gains deductions.
What are the costs and expenses of an estate administration?
Below we have grouped the costs and expenses of an estate administration into five categories; Last debts. Property maintenance/management expenses. Distribution expenses. Fees. Taxes.
What are the main expenses of an estate?
The main expenses of an estate include: Outstanding debts. When someone passes away their debts don’t automatically disappear. The executor is responsible for notifying creditors that the deceased has passed so that they have time to make a claim against estate assets. Taxes.
What expenses should be reimbursed during probate?
Any expenses incurred should be reimbursed by the estate. Final bills are bills for which the full amount can only be paid once the probate process is complete, such as taxes, credit card bills, and medical bills. These bills should only be paid by the executor using money from the estate once probate has concluded.