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Navigating the Probate Process?
(Excerpt from: Munro, Margaret and Murphy, Kathryn, "Estate & Trust Administration". Wiley Publishing, Inc. 2009.)

   The decedent has been laid to rest and you've handled the immediate tasks after the death. Now that you've had a moment to breath, you need to take the next steps in wrapping up the decedent's affairs. Now's the time (probably within a week after the decedent's funeral) to decide whether you need probate court administration of any of the decedent's assets, and if so, how to keep probate as simple as possible. Probate is the process whereby the decedent's will, if any, is proved valid or invalid and the assets in the decedent's name along, or payable to the estate, are administered in the probate estate with probate court supervision. This [article] explains how to get the decedent's will (if any) recognized by the probate court, and how to get yourself appointed as executor(s).

   Throughout this [article] we make reference to state law and probate court rules. No two states' laws are exactly the same, no two states' probate court rules are the same, and as a matter of fact, probate court practices can differ from county to county. And not all courts that administer wills are called "probate courts." So when we discuss the procedure for probating your decedent's property, you can pretty much count on some quirk in how your decedent's county and state handle probate administration that's different from the quirkiness we describe here. We also refer, in general, to the executor. But if there's no valid will, you're the administrator. In some states you're called the personal representative or some other name, but we're still referring to the person appointed to administer the estate. And the term fiduciary refers to all of the above. That's the beauty of individual state law!

Filing the Last Will with the Probate Court

   In most states, the person who has possession of the will is required to deliver the will to the executor or file the will with the probate court within a certain period of time (for instance, 30 days) after the decedent's death. If you're in the delicate position of knowing who has the will but hasn't filed it, you may notify the court so that the court can compel the filing. Then the probate process can begin. In practice, you file the will with the petition for probate if you decide probate is required, hopefully within the 30-day window. Most courts give you some leeway, but make sure that you know if your probate court will. If it turns out there are no assets requiring probate, simply take the will to the probate court and sign a statement to that effect.

   If the decedent left a will but the estate doesn't have any assets subject to probate, the law still requires you to file the will. Just inform the probate court that, to your knowledge, no assets are subject to probate. This situation can arise when:

  • The decedent has fully funded (that is, transferred all of his or her assets into) his or her revocable trust before death.
  • The decedent held all of his or her assets jointly with rights of survivorship with the surviving spouse or other persons.
  • The decedent may have died penniless (which makes your job much easier)

Figuring Out Whether Administration Is Necessary

   Before you can decide whether probate court administration is necessary, you first need to get an accurate picture of all the assets in the estate. You need a good idea of both the size of the assets and how the title is held. Remember, anything held in the decedent's name alone, payable to the decedent's estate, or held jointly for convenience only is subject to probate.

   To help you make an accurate determination, this section takes you through the steps involved in determining whether and what kind of probate administration is necessary. Probating the decedent's estate through the probate court system and taxing the decedent's estate for federal estate tax and state estate or inheritance tax purposes are two entirely different animals. Just because you're not dealing with a probate estate doesn't mean it won't owe estate or inheritance tax. Tax law isn't based on how the property was held but rather on who actually owned the property at death, and in the case of state inheritance tax, who receives it.

Do you need  temporary executor?

As soon as you receive word of the decedent's death, take a look at the estate plan documents and start compiling the asset information. If any assets subject to probate need immediate action (either to preserve them or their value or to manage them), you may need to apply for temporary executorship (can be done only if the will permits) or temporary administrator with will annexed because your appointment as executor may take a few weeks - or sometimes more - to accomplish. Your appointment as temporary executor or temporary administrator can be accomplished much more quickly than your appointment as executor.

    You typically accomplish temporary administration through a written motion to the court where you set out the reasons if's being sought and the powers you're requesting. Some courts may have a form of petition to present. In either case you need to present it in person to the court, along with a certified copy of the death certificate, the original will if it hasn't already been filed, and any other documents required by the local court (check with an assistant probate register). If your request is granted, your powers will be limited tho those sough in the motion and approved by the court, except as set out by state law (typically to collect the personal property of the decedent and preserve it for the executor). Some instances in which you may want to apply for temporary administration:

  • To preserve the value of stocks and bonds held by your decedent. Because of the nature of the stock market, you may want to sell these assets quickly to avoid a decrease in value. Your duty as executor is to preserve the estate assets for the beneficiaries, not to grow the estate. So, for example, you may want to sell all the volatile securities and convert the holdings into more stable assets to preserve the value of the estate for ultimate distribution to the beneficiaries. Remember, any income tax consequences for the sale of these assets are small because the tax basis has stepped up to the value on the decedent's date of death. And keep in mind that you don't get credit or thanks for any gains on assets during estate administration, but you can surely be held accountable for any losses. Check your local law on this issue with an attorney experienced in local probate.
  • To continue your decedent's business.
  • To manage real property held by your decedent.
  • To pay expenses of last illness, funeral expenses, and taxes.
  • To gain access to the decedent's safe deposit box to look for the decedent's will, if your state doesn't provide an alternative means of entering the box.
  • To bury the decedent.
Do you need a special administration?

   A special administrator can be appointed whether or not there's a will. A special administrator is a temporary fiduciary appointed by the court in many states to marshal and preserve the assets when a delay is foreseen in appointing a permanent fiduciary, perhaps due to a will contest or problems serving notice on interested parties.

Where there's a will
   In the case of a will contest, a person having an interest in the estate can file a petition for special administration in the probate court, along with a certified copy of the death certificate. The petition must certify that the Division of Medical Assistance has been sent, by certified mail, copies of the petition and the death certificate. The petition should also name exactly what powers are being requested. Without specific court authority, the power of a special administrator is quite limited. if all interested parties asset to the petition, it can be allowed without having to publish a legal notice in a local newspaper. But, even without assents, the judge may allow the petition. Although the named executor sometimes files the petition, in the case of a will contest there may be objections, in which case a disinterested third party may be appointed. The period of appointment can be quite brief, up to 90 days, except in unusual circumstances, in which case the court may make an appointment for an indefinite period.

When there's no will
   If the decedent died intestate, special administration, or its equivalent, is the only form of temporary administration available. Temporary administration may be sought because of a delay in giving notice to all the interested parties, or because of a dispute over who is to be appointed as permanent administrator. Special administration may be asked for to administer assets, or to open a safe deposit box. All relevant information from the preceding section applies here also. Again, check with your local court to see what type of special administration is available to you.

Determining domicile

    Knowing where the decedent's domicile (where the decedent had his or her primary residence) was at the date of death is key when figuring out where you must probate the assets and what state you must pay taxes to (although real estate is subject to state estate or inheritance tax, if any, in the state in which it's located). All real estate in the decedent's state of domicile and all other tangible and intangible assets located anywhere in the United States are subject to probate in the decedent's state of domicile if all other requirements for probate are met. Only after you've made that determination can you begin primary probate in the correct court and ancillary administration in any other state where the decedent owned property.

    It may seem odd to even question where the decedent lived at the time of death, but often the decedent's official home may not have been where you thought it was and so much of estate administration rests on the decedent's legal home.

    In many instances, determining domicile is as easy as can be. Uncle Jim was born on the farm, worked on the farm, and you buried him from the farm (and maybe on the farm) after he died. The farm was, without question, his domicile. But in many cases, people own real property in more than one place, and even more than one state (one country), and they pay taxes in more than one state at any given time. If you're responsible for administering an estate that owns real estate located in multiple places, how do you know where to initiate probate?

    The list of items used to determine domicile is long, and far from absolute. Certain items on the list may indicate one legal home, but others may show a different one. You have to make the final determination based on the weight of the evidence. Be prepared to back up your results to the state(s) that loses; for the states in question, large potential tax revenues may lie in the balance.

    Evidence used to determine domicile include the following:
  • Address of residence where the decedent lived more than 50 percent of the time.
  • IRS office where tax returns are filed.
  • Place of religious affiliations.
  • Car registration.
  • Voter registration.
  • Address shown on passport.
  • Bank accounts established in local banks.

Information in this article is provided for general informational and educational purposes only and is not offered as legal advice upon which anyone may rely. The law changes. Legal counsel relating to your individual needs and circumstances is advisable before taking any action that has legal consequences