Estate planning is essential for ensuring a smooth distribution of your assets after you pass away. Although much of the focus in estate planning revolves around the assets themselves, how those assets will be distributed is also a critical part the plan. One of the tools used to do that is a letter of testamentary. And whether you're beginning to make an estate plan or handling someone else's affairs, understanding how this document works is vital for effective estate management.
What is a letter of testamentary?
A letter of testamentary is a court-ordered document that grants the executor of an estate the authority to manage the deceased person's assets. The executor of an estate is responsible for carrying out the wishes outlined in the will and handling financial matters — like settling debts and taxes, creating an inventory of assets and supervising the distribution of assets.
The creator of a will appoints an executor for their estate, but a probate court has to officially authorize it with a letter of testamentary. These letters — along with a legally binding certificate of death — serve as proof of your authority to settle a loved one's estate.
When do you need a letter of testamentary?
There are several situations in which you may need a letter of testamentary. Here are some of the most common scenarios:
- To access financial accounts: Financial institutions may require a letter of testamentary to show you have the legal authority to access bank accounts, investment accounts and other financial assets of the deceased.
- To sell or transfer real estate: Letters of testamentary can serve as proof to real estate agents and title companies that you have the legal authority to sell or transfer property that belonged to the deceased.
- To represent the estate during legal proceedings: If legal action is needed during the estate settling process, a letter of testamentary demonstrates to the court that you have the authority to represent the estate’s interest.
- To file taxes: The Internal Revenue Service (IRS) may require a letter of testamentary to prove you have the legal authority to settle the tax obligations of the deceased, such as income taxes and estate taxes.
- To transfer vehicle ownership: The Department of Motor Vehicles (DMV) may require a letter of testamentary to transfer vehicle ownership to a deceased person’s heir or beneficiary.
How to get a letter of testamentary
The process to obtain a letter of testamentary can vary by state and jurisdiction, but you’ll typically need to do the following:
- Get a copy of the will.
- Get the death certificate.
- Petition the court for a letter of testamentary.
- Appear in court.
Essentially, you'll need to gather the appropriate documents, file an application and pay any applicable fees to the probate court. Once you’ve done this, a court hearing will be scheduled in which a judge will evaluate the will and decide if you’re fit to serve as the executor of estate. If you're approved, a letter of testamentary will be issued.
How legal insurance can help
Legal insurance can be valuable when obtaining a letter of testamentary and navigating the probate process. Legal insurance, also known as prepaid legal or group legal, connects you with a network of attorneys who can assist you with various legal matters, including estate planning. For instance, when you need to obtain a letter of testamentary, an attorney can help guide you through the process.
Once you’re ready to petition the court for a letter of testamentary, you can use legal insurance to assist with preparing and filing the necessary documents. And if any disputes or complications arise during the probate process, legal insurance can offer you legal representation to help resolve them.
Letters of testamentary FAQs
Can you get a letter of testamentary without probate?
Obtaining a letter of testamentary without going through probate may be possible in specific situations, but typically, you'll need to go through probate. Consult with an attorney who is experienced in estate planning to understand your options.
Can you get a letter of testamentary without a will?
If a decedent dies intestate (without a will), the court will usually appoint someone to administer the estate — this will typically be a spouse or next of kin. The administrator will be issued what’s known as a letter of administration. This gives them the same legal authority granted by a letter of testamentary.
Do you need a letter of testamentary with a trust?
No, you don't need a letter of testamentary to access assets in a trust. Unlike a will, assets in a trust are managed and distributed without court intervention.
How much does a letter of testamentary cost?
The cost of obtaining a letter of testamentary can vary by location, estate complexity and legal services required. Costs will typically range from a few hundred dollars to several thousand depending on your specific situation. In addition to paying for the physical document, other costs may include filing fees, legal fees if you hire an attorney and court fees.
Bottom line: Do I need a letter of testamentary?
If you’ve been designated as the executor of a will, you’ll most likely need a letter of testamentary in order to carry out your duties. But to determine whether your specific situation requires a letter of testamentary, it’s a good idea to consult with a probate lawyer.