Probate
What is probate?
Probate is a legal proceeding used to manage the property of someone who has passed away. The process involves gathering assets, paying debts, and distributing property. The primary difference between probate and trust administration is that probate is done through a court proceeding, whereas trust administration can be private and done entirely without any court review or intervention. When someone leaves behind a will, one of the court’s roles is to ensure that the deceased’s wishes as to how their property is to be distributed are carried out as they had intended. When someone dies without a will or trust, the court will follow “the laws of intestate succession,” which provide that the decedent’s property is distributed to their heirs based on how closely they are related to the deceased.
Probate is also a means by which the deceased’s creditors can have their debts paid to the extent that there is property in the estate. Contrary to popular belief, the heirs or beneficiaries do not inherit debts. However, debts can diminish the estate and potentially leave little to nothing for distribution. If debts are not paid in full, the remaining balance will be unenforceable (similar to a discharge in bankruptcy).
How we can help.
While probate proceedings can become incredibly complex and involve non-probate laws, even the most simple probate has many issues which need to be addressed, such as when there is a challenge to the will, whether the personal representative (an executor or administrator) should be required to post a bond and if so how much, what debts should be paid, should the deceased person’s business continue to operate, what happens to any lawsuits the deceased person was involved with, issues regarding title to property, what happens is someone holding property will not turn it over, and so on and so on… As experienced probate lawyers, we will help avoid potential pitfalls and will help make the process as seamless as possible.
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Preliminary Considerations
As your attorneys, we will be assisting and guiding you with every facet of the estate administration and are prepared to answer your questions and address your concerns. We will generally prepare the notices and accountings with your input. The following is an overview of the duties of an administrator or executor.
The executor or administrator should go through the deceased person’s files, statements, bills, tax returns, mail and e-mails in an effort to locate and identify assets and debts of the deceased person which are not otherwise apparent.
Appointment of a personal representative
If the deceased person had a will, it will typically name a person to act as the personal representative, or executor of the will and the estate. If there is no will, if one person wants to act as the personal representative, or administrator of the estate, that person will most often be appointed. But if two or more persons petition to act as administrator or someone object to the person seeking appointment, ultimately, it will be up to the judge to decide who is to act and may even require a trial to make that determination before the probate process can even get started.
What is the difference between an executor and an administrator?
An executor is a person who has been specifically named in the will of the deceased person to manage the estate. An administrator is a person who is appointed by the court when there is no one named in a will to act or when there is no will. After being appointed, whether as administrator or as executor, the duties are essentially the same.
Posting Bond
Another determination which must be made is whether a bond will be required, and if so, what is the amount of the bond. A bond is similar to an insurance policy for the benefit of the beneficiaries of the estate, so that if the personal representative takes any money from the estate, or is negligent and causes a loss to the estate, the beneficiaries can look to the bond to recover what they would have received if not for this malfeasance. The amount of the bond is generally determined by the value of the property of the estate, plus one year’s income from estate property. One reason that only limited authority to administer under the IAEA is that the amount of the bond will generally not include the value of the real estate and will therefore be less costly. The cost of the bond is borne by the estate and the amount of the premiums are generally based on the amount of the bond required and the credit of the proposed personal representative. If a will or all of the heirs or beneficiaries waive the requirement of the posting of a bond, a bond will normally not be required.
Initiating Probate
The opening of a probate proceeding and the appointment of a personal representative requires that the court make four basic determinations: If there is a will, will it be proven to be valid and be controlling in the proceeding, who will be the personal representative, will that person be granted authority to act pursuant to the Independent Administration of Estates Act (IAEA) and will the posting of a bond be required.
Admission of Will to Probate
Even when a person has a will, there can be many obstacles to having it admitted to probate so that the person’s wishes as stated in the will are followed. Wills can be holographic, meaning that they have been handwritten by the deceased person. In order to be admitted to probate, this type of will must be in the decedent’s own handwriting, must have some indication that it is intended as a will, and must be signed by the deceased person. While it is best for such a will to be dated, it is not an absolute requirement.
A typed or printed will must be signed by the deceased as well as two other individuals who witness the signing of the will. It may become necessary for the witnesses to sign a document to be filed in the probate proceeding or even appear in court to testify.
Heirs or beneficiaries can contest the admission of the will to probate on grounds such as fraud, undue influence, duress or lack of capacity by the deceased person. Such a contest can require the retention of experts and can require ultimately a trial in the probate court to resolve.
The Independent Administration of Estate Act
Independent Administration of Estates Act (IAEA). The IAEA is designed to ease the administration of an estate by allowing the personal representative to take certain actions by giving notice of the proposed action to the beneficiaries, who can then consent or object. If there are objections, the personal representative can generally proceed with the proposed action.
With only limited authority, the executor or administrator will only be able to sell real estate in accordance with a court supervised procedures which will require a court hearing to confirm the sale. A notice that the sale is going to be conducted will have to be published in a local newspaper and other prospective buyers can come in and overbid the property, by agreeing to pay a higher price.
Because of the delays and uncertainty of being able to complete the sale, the property may sell for less than it would without these obstacles but could, in fact, be sold at a higher price due to the overbidding process.
Accounting & Distribution
Once all assets have been gathered, inventoried and appraised, all debts and taxes have been paid, and all estate issues have been resolved, an accounting of all income and disbursements will be filed together with a Petition for Final Distribution of the estate.
So long as the accounting shows that the estate has been managed properly, the Court will grant the petition and allow the personal representative to make distributions to heirs and beneficiaries.
