What to Expect From the Asset Distribution Process During COVID-19
After someone passes away, their friends, family, and other beneficiaries do not immediately collect any bequeathed items. Instead, it takes about two months to a year, on average, for assets to actually be distributed. During COVID-19, there are some changes that may make this process even lengthier.
The Whole Process Will Take Longer
One of the first effects you may notice is that the whole asset distribution process is getting a lot lengthier because of COVID-19. When a person passes away, their will typically needs to be reviewed through the probate court process. After a will goes through probate, the executor then has to take steps to locate and value all assets. Before assets are actually distributed, all the deceased’s final bills and applicable tax returns also need to be filed.
Each one of these steps has been delayed because of COVID-19. With many legal courts and government offices busy dealing with a backlog, it may be awhile before they can attend to new cases. Sadly, more than 185,000 people have passed away from COVID, so there are also far more wills to be validated altogether. Finally, many of the banks, investment firms, and other holders of assets are also doing things a little slower than normal, so locating assets is tricky.
Valuing the Estate Gets More Complicated
Usually, all of the deceased’s assets are valued based on their value at the date of the deceased’s death. However, estate planning lawyers do have the option of using alternate valuations that look at asset value six months after death. During COVID-19, many assets are fluctuating wildly in value. Certain luxury real estate and commercial businesses are declining in value while others may be on the rise. Careful consideration during the asset valuation process can save a lot of money on estate taxes for the beneficiaries, so it is worthwhile to look into this closely. Though it takes more time, wise COVID asset valuation can end up saving everyone money.
Some Asset Division Can Lead to Controversy
Any situation that involves allowing beneficiaries to choose individual assets is prone to all sorts of arguments and disagreements. During the COVID-19 pandemic, these sorts of asset distribution disagreements are bound to get worse. Like many of the other challenges of COVID asset distribution, it all comes down to the fact that asset values are so uncertain right now. When beneficiaries disagree over the potential value for real estate, investments, and other items with fluctuation value, things can get heated. One person may feel their desired portion is fair while another believes that they are not receiving an equitable distribution. To prevent this from happening, it is a good idea for the writer of the will to specify what assets go to each person.
Turning Assets Into Cash Should Be Done Carefully
Depending on the type of estate planning the deceased left, you may need to liquidate the estate before transferring cash to all the beneficiaries. Trying to liquidate can be one of the trickiest parts of asset distribution during COVID. Things like life insurance and retirement funds are fairly straightforward, but things like investment accounts and real estate are more challenging. It may be wise to discuss things with financial advisors before proceeding. Choosing to liquidate at the wrong time could keep beneficiaries from getting the true value of the property.
Have any more questions about the asset distribution process? The Knee Law Firm is happy to help all Hackensack, New Jersey, residents through each step of distributing an inheritance. With our expertise, we can identify and avoid certain roadblocks that may come up during COVID-19. Advice from a knowledgeable estate planning lawyer can help asset distribution and related estate planning during COVID run as smoothly as possible. Fill out our contact form online or call 201-996-1200 to schedule a remote meeting with us.