Probate and Estate Administration Chapter 9

Probate or Estate Administration Probate –The act or process of proving the validity of a will Estate Administration Procedures and duties of the personal representative, which include the collection and inventory of assets, payment of approved claims and taxes, final distribution of the assets to beneficiaries or heirs entitled to receive them

Small Estate Settlement and Administration Small Estate –An estate with few assets or limited monetary value The amount varies by state and is set by statute Avoids the lengthy and costly probate process

Collection by Affidavit Title and possession of personal property are transferred from a small estate to beneficiaries or heirs without the involvement of others

Summary Administration Applies to smaller estates that do not exceed the maximum limit set by statute An abbreviated probate process Shorter and simpler than regular estate administration

Family Settlement Agreement A private written agreement among heirs or beneficiaries in which they unanimously agree on the distribution of the estate without supervision by the court

Commencing Probate and Estate Administration Petition for probate of will or petition to prove the will Petition for administration when no will exists Obtain an Order for Hearing Publication of Notice of Order for Hearing Mail notice of rights to beneficiaries Pay funeral expenses Miscellaneous duties before the hearing

Probate Court Procedure Hearing to prove the will or petition for administration Appointment of personal representative Order admitting the will or granting administration Issuance of Letters Testamentary or Letters of Administration

Probate Court Procedure File for a Federal Employer Identification Number Open an estate checking account Notice to Creditors Appointment of guardians and trustees Order admitting a foreign will to probate

Procedures before Estate Distribution Open the safe deposit box Collect and preserve assets Prepare an inventory –Detailed list of property, description, and value at the decedent’s time of death Prepare an appraisal –Market-based evaluation of property Prepare a schedule of nonprobate assets File the inventory and appraisal

Distribution of Estate Property and Payment of Claims Distribute family allowances and exempt property to the spouse and/or minor children Attend the hearing on creditors’ claims and pay approved and allowed claims Transfer assets Address special issues related to digital assets

The Final Account File the Final Account and Petition for Settlement and Distribution Give notice of the hearing to interested parties Prepare and file federal and state income taxes with the Final Account Request Order Allowing the Final Account

Closing the Estate Receive Order for Settlement and Decree of Distribution Collect receipts for distribution of assets to beneficiaries or heirs File Petition for Discharge of Personal Representative Cancel the personal representative’s bond

The Personal Representative’s Liability A personal representative who acts reasonably and in good faith faces no personal liability for decreases in the value of estate assets during administration If decreases in the value of estate assets are caused by a personal representative’s breach of fiduciary duties, the court will impose damages on the personal representative to compensate the estate for the loss