Do you need to access a loved one’s bank accounts, settle their debts, or transfer property after their passing? Good thing a Letter of Testamentary is here to help.
This crucial legal document, issued by a probate court, grants an executor the authority to manage and distribute a deceased person’s estate according to their will.
However, only 32% of Americans have a will or estate planning document, meaning many estates end up in probate, which can be a lengthy and costly process.
Additionally, it ensures that executors can legally handle financial matters, settle obligations, and distribute assets. This document allows the executor to access financial accounts, settle debts, and transfer assets to beneficiaries.
In this guide, we will cover everything you need to know about Letters of Testamentary, including their purpose, how to obtain them, and the associated costs.
What Is a Letter of Testamentary?
A Letter of Testamentary (sometimes referred to as “Letters Testamentary”) is an official court document that authorizes an executor to act on behalf of a deceased person’s estate. It serves as proof that the executor has legal authority to handle financial matters, file taxes, and distribute assets according to the will.
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Why Are Letters Testamentary Important?
Financial institutions, government agencies, and other organizations often require a Letter of Testamentary before allowing the executor to take any actions related to the estate. Without it, the executor may face significant challenges in fulfilling their responsibilities.
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The Purpose of a Letter of Testamentary
A Letter of Testamentary grants an executor several legal powers, including:
Accessing Financial Accounts
Banks and investment firms typically require it to allow the executor to manage the deceased’s accounts.
Filing Taxes
The Internal Revenue Service (IRS) may request it to process the deceased’s final tax return and estate taxes.
Selling or Transferring Property
Real estate transactions, whether selling or transferring property, usually require proof of the executor’s authority, which is provided by the Letter of Testamentary.
How to Obtain a Letter of Testamentary
To obtain a Letter of Testamentary, the executor must go through the probate process. The steps typically include:
Filing a Petition
The executor named in the will must file a petition with the probate court in the county where the deceased resided. Moreover, required documents often include:
- The original will
- A certified copy of the death certificate
- A formal request for Letters of Testamentary
Attending a Court Hearing
The court will review the will and verify that the executor is qualified to serve. If no objections are raised, the court will approve the appointment.
Issuance of the Letter
Once approved, the court issues the Letter of Testamentary, officially granting the executor legal authority to manage the estate.
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How Much Does a Letter of Testamentary Cost?
The cost of obtaining a Letter of Testamentary varies by state and complexity of the estate. Common expenses include:
Court Filing Fees
Court fees can range from $50 to $1,200, depending on the jurisdiction.
Attorney Fees
While an attorney is not always necessary, hiring one can be helpful for navigating the probate process. Fees vary based on the complexity of the estate and the attorney’s experience.
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Letter of Testamentary vs. Letter of Administration
If a person dies without a will (intestate), the court cannot issue a Letter of Testamentary. Instead, the court appoints an administrator and grants a Letter of Administration, which provides similar authority to manage the estate but follows state intestacy laws.
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Conclusion
A Letter of Testamentary is an essential document for executors managing a deceased person’s estate. Understanding its purpose, the process for obtaining it, and the associated costs can help ensure a smoother probate process while avoiding unnecessary delays.
If you’ve been named an executor, consulting with a probate attorney or researching your local probate court’s requirements can help you navigate the process more efficiently. For more insights on estate planning, probate, and financial management, stay informed with Financial Daily Updates to make well-informed decisions for the future.
