Sometimes the administration of an estate can be done without the assistance of legal counsel. What? Did a lawyer just tell me not to hire him? Easy now, we like happy clients. If the assets in the estate are not complex and you have the time and energy to focus on your appointed duties, it is possible to manage an estate to competition without assistance.
If you have been asked to be a personal representative of someone’s estate, or you are just finding out now after someone has passed, this article is designed to provide you an overview of what to expect.
What Goes Through Probate Court
Not all of a Deceased’s assets are subject to Probate Court proceedings. If the Deceased has a Will, all assets titled solely in the Decedent’s name are subject to Probate. What about jointly held property? Nope. What about insurance policies with adult beneficiaries? Nope. What about property titled in the name of a Trust. Again, nope. So, if the Decedent has done some estate planning you job as Personal Representative is looking much easier. So easy in fact you may not even have to file in Probate Court at all. And, even if solely title assets exist, if they are a certain type and below a certain amount, you may be able to file under a simplified probate procedure. But if not, here are some of the steps.
Petition for Appointment and Validity of the Will
The first step in the process is to petition the Probate Court for appointment as the personal representative and to ascertain the validity of the Will. Important point here. You should do this step first. If you start trying to act as the Personal Representative before the Court appoints you as the Personal Representative, you could get yourself in hot water. So, take this step first. Just because a Will names you as the Personal Representative, it does not make it so until the Court approves it that authority.
Obtain Letters of Administration
Once appointed by the Court, your job is to inventory and collect the assets of the estate. Collecting may not require actual physical possession, but more on that later. To assist you with this, the Court will provide you with “letters of administration.” These letters will allow banks and other financial institutions to transfer the accounts from the Decedent’s name into your name so you can later distribute them in accordance with the Decedent’s wishes.
Marshal the Assets
Your next job can be the most time consuming and probably the one that will cause the most problems if not done correctly. Before you can distribute the Decedent’s property you first have to inventory it. If the value of any assets are unknown, you will have them appraised. Also, if you live in a community property state, like California (or even if you don’t but the property was acquired in a community property state and retained its character), this means marshaling the Decedent’s separate property and one half interest in community property.
Physical Possession Not Always Required
As you marshal the assets, its important to know that you can exercise some discretion in actually taking physical possession. For example, if an intended beneficiary is already in physical possession of property, you may choose to leave it with them until the estate is finalized. In other words, you may determine that inventorying is enough. On the other hand, you do have the authority to take possession of an asset if you feel at your sole discretion it is necessary to do so.
Two caveats: First, the deceased’s spouse (or domestic partner) and children are permitted to temporary possession of a family dwelling and its contents until 60 days after the estate inventory is filed. Second, if you find that some personal property, (not specifically identified in the Will), too costly to marshal, you may choose to dispose of it instead. In other words, if it would cost more than its fair market value to “marshal,” you may choose to dispose of it instead. Before you do so, you must provide written notice and give interested parties an opportunity to make an objection.
Asking For Court Help When Needed
The Probate Court can be your friend. If people with possession or knowledge of the Decedent’s property are being … unhelpful, you can seek the Court’s assistance. You might need legal counsel to assist with this, but you can ask the Court to compel them to respond to written questions, produce documents, sit for an oral deposition, or even appear in Court to respond to questions.
File An Inventory and Appraisal Form
From the time you receive the letters of administration, you have four months to complete an inventory of the estate’s assets and file an inventory and appraisal form. As this form is public record, you may understand why many people choose to use a Trust, rather than a Will, as an estate planning tool. Trusts, as you may know, are not subject to Probate unless challenged. And even if challenged, only in rare instances, such as claims of theft, would the challenge require an inventory of the estate. So, there is typically no public record of your assets when you use a Trust.
The Appraisal
As a next step, the inventory and appraisal form is then sent to the probate referee for appraisal of all non-cash assets. The probate referee will list the values resulting from appraisal on the inventory and appraisement form, and file with the Court. To ward of possible challenges, you may choose to hire an independent expert to appraise unique items.
Notice to Creditors
At the same time you are conducting your marshalling duties, you will provide notice to any of the Decedent’s potential creditors. As these claims are reported to you, you will need to determine whether to pay them, or reject them. If you reject them, the creditors may file with the Court to prove the validity of their claims and collect money from the estate.
Respond to Objections to the Inventory
Once filed, any interested person may file written objections the inventory and appraisal form. If filed, you may need to respond to and attempt to resolve these objections. In you are unable to resolve, the Court will hold a hearing on the objection and provide the objector the opportunity to prove his objections are warranted. Frequently, objections occur when a creditor feels an asset has been under appraised, and therefor may risk not being paid.
Petition for Final Distribution
This step, done out of order, is the one that can get you in trouble. Before you make a final distribution, you must petition the Court for final distribution. Once approved you may distribute the assets to the named beneficiaries. You can also claim your statutory Personal Representative fees. As many Personal Representatives are also beneficiaries, they often waive these fees.
If real property is included in the estate, a change in ownership must be filed with the County assessor. Beneficiaries should be aware that this may result in increased property taxes, unless an exemption is available.
Takeaway
Most people assume the role of a Personal Representative to honor the Deceased’s request and legacy. In some instances, they can handle it alone. Other times, they just don’t have the time or knowledge to complete all the required tasks under the Court’s timelines. If you aren’t sure which you are, don’t hesitate to call for a free consultation, or review our Frequently Asked Questions and other free resources available on this website. Whether Legacy or Business Planning, Contact CASHMAN LAW to get the Plan You Deserve.™
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