Probate Administration Basics

Someone passed away. The Will names me as Executor. What do I do?

This Article intended for estate personal representatives

Probate is a lot of work which could have been avoided by estate planning

Doesn’t matter if there is a Will or not. – Probate Court proceedings are needed to transfer ownership of assets, properties and accounts to the heirs.  If there is a Will but no living trust then Probate Court proceedings are needed.  If there is no Will and no living trust then Probate Court proceedings are needed.  There are some minor exceptions to this which include accounts of less than $150,000 and joint tenancy property.  The exemptions are discussed is separate blogs.

Events triggering probate administration

Probate administration is the legal process to organize a deceased person’s affairs under court supervision and to ultimately distribute his estate

Basic responsibilities

There are stringent laws and court rules about what an executor must do and what forms and reports must be filed with the Probate court.  Failure to follow proper procedures can have serious financial and legal consequences.

So, assuming a probate is needed – there are numerous things to be done and various filings with the court and various appearances needed at the Probate court.   Here is a general outline of what is to be done.  Expect all this to take a year or more because there are so many court steps.

BASIC STEPS	PURPOSE/EXPLANATION
♦ Consult and retain an attorney	Because the probate process is so complicated, most people consult with an attorney who practices in the probate and trust field.  The larger the estate and/or the more heirs there are the more likely that an attorney will be needed to get the estate administered.  Typically, it takes a year or more to do all the legally required steps and to ultimately get the probate court’s permission to distribute the estate.
♦ File a court petition to get the executor appointed	Until the Probate court appoints a personal representative (i.e. executor or administrator), nobody will have authority to act on behalf of the deceases and his/her accounts and properties.  Once appointed by the court, the personal representative will have a court form known as “Letters of Administration” with the official seal of the court which will identify him/her as the estate personal representative.
♦ Notifications & certificates	Original death certificates are needed and notices need to be sent to the heirs in proper legal form and within legal deadlines about the petition to get the executor appointed.  The notification gives all heirs and interested persons an opportunity to object.
♦ Formal notice to heirs	The process of petitioning the Probate court for appointment of the personal representative notifies the heirs.
♦ New tax ID# & banking	A new tax ID# must be obtained from the IRS for the Probate estate by the personal representative and some or all of the deceased’s bank accounts and securities accounts will need the new ID# and new account signature cards to allow the personal representative to sign on the accounts.
♦ Inventory of assets	All accounts, personal property and real estate needs to be inventoried and inventory reports on court forms must be made to the Probate Referee who is appointed by the court to appraise the estate assets.
♦ Appraisals	Appraisals of all real estate and valuable personal property are needed typically for tax and for the estate inventory purposes.  Depending upon what assets are involved, the Probate Referee may be able to handle this but not always.
♦ Notify creditors & pay debts	All bills need to be paid and creditors notified.  There are court required forms to be sent to all known creditors and publication procedures of a notice of death are required as well.
♦ Insurance & Pension Plans	Notification of death needs to be done and paperwork may be needed to the insurance or pension companies to get the money paid over to the probate estate or to the named beneficiaries.
♦ Real estate titles	Documents need to be filed with the county recorder because of the death and the property tax situation considered.  Ultimately all estate real estate must either be sold or distributed to the heirs.  The will and the cash needs of the estate to pay debts and taxes all have to be considered by the personal representative to figure out what to do.  If the property is to be sold, certain forms will need to be filed with the court and possibly there will need to be a court approval of the sale and an opportunity for overbids.
♦ Business & investment changes	If the decedent owned a business or shares in some type of investment involving other owners then various documentation will need to be done and possibly various legal steps will need to be taken by the personal administrator so that the business will continue.
♦ Allocations of community and separate property	If the deceased left a surviving spouse, then the property and money has to be sorted out between the probate estate and surviving spouse.
♦ Property taxation issues	Determine property tax effects of the death on each parcel of real estate and consider options depending upon how property is to be disposed of. If residences or investment properties are to be inherited by the heirs and not sold, then the personal administrator has to determine what forms to file with the county and if exemptions are available to keep the property taxes from being increased.
♦ Income, estate and gift tax returns	Income tax returns for the probate estate and for the deceased person need to be filed as well as possibly estate and gift tax returns. The deadlines for filing of these forms must be strictly complied with.
♦ Accounting & distributions	Probate law requires a detailed formal accounting as part of the probate administration unless the heirs waive a formal accounting.  After the final accounting is filed with the court, and  if there are no objections to the accounting, the probate estate is distributed to the heirs in accordance with the instructions in the will of the deceased.  If the deceased died without any will, then the state laws on intestate succession are applied to determine who inherits the assets in the estate
♦ Most people opt for doing a living trust	After having gone through all of the forms, paperwork, fees, and lengthy time for waiting for court hearings and necessary filings to be done, most people realize that it would have been a whole lot easier and cheaper if the deceased would have established and funded a living trust before he/she passed away.

Caution:

If the heirs don’t get along with the executor/administrator then expensive and lengthy court litigation can occur.  There can be litigation over any of the above steps if people don’t agree with how the estate is being handled.  Crockett Law Corporation  can guide the executor/administrator as to how to effectively communicate with the heirs and suggest ways to avoid disputes with cost everybody time and money.

Conclusion/Role
of the estate/trust lawyer

Probate is a lot of work which could have been avoided by estate planning through the use of a living trust or other techniques. Attorney David Crockett is available to advise and assist on all estate administration matters.