DETAILS OF PROBATE ADMINISTRATION
Probate administration begins after the death of someone. Probate is opened with a petition and a filing fee, accompanied by the death certificate. The petition is usually filed by the person named to be the Executor if there is a will, or by any person of good character, a spouse, a relative, or friend who is willing to come forward and administer the estate. Estate administration can be waived using special forms if the surviving spouse is the sole beneficiary.
The Executor or Administrator is responsible for the finances of the estate while it operates, and accounting to the probate court during the period the estate is open. As a fiduciary, the executor or administrator acts for the benefit of other people, and not just himself or herself. The fiduciary must make prudent decisions that benefit the entire estate and all the creditors and beneficiaries of the estate. The fiduciary is bonded in an amount determined by the probate court after the estate petition is filed, and letters of administration (or fiduciary appointment) are issued by the probate court once the bond is filed.
The fiduciary then has legal authority to operate on behalf of the estate. The first task is identifying and marshalling the assets of the estate. Life insurance policies must be claimed, bank accounts in the name of the decedent must be closed and funds transferred to an estate account, stocks and bonds must be managed or liquidated as prudence would dictate, personal property gathered up and secured. Inventory of the assets of the estate is due usually 90 days after administration is granted, preferrably with professional appraisals of real estate, more valuable articles of personal property, and antiques or collectibles. If there is a business, the fiduciary must make appropriate arrangements to carry on the business or arrange its sale.
|“The estate’s fiduciary should seek legal counsel to understand the many obligations and duties.”|
The fiduciary must notify creditors of his administration, and creditors must make their claims known to the fiduciary. The fiduciary is required to investigate and allow appropriate debts owed by the decedent to the extent that there are adequate assets of the estate to pay them. Special rules govern insolvent estates.
The fiduciary manages the assets of the estate to pay claims and fund the ongoing expenses of administration. Tax returns to the Internal Revenue Service for the decedent’s last year of life and for each year of the estate administration may be required to be filed, as well as state tax returns depending where the decedent earned income or owns assets. Yearly accountings of the estate’s activities are filed with the probate court until the administration is complete.
Probate law provides a list of priorities of who gets paid in an estate administration. The last ones on the list are the heirs or devisees of the estate. They are paid only after all taxes, creditors, and administrative expenses have been paid.
There are so many different rules and forms for probate, and so many different requirements that it makes sense of the fiduciary to contact us to help. Many costly mistakes can easily be made without counsel familiar with all the requirements. Legal fees are paid from the assets of the estate as an administrative expense.