1. Chapter 11 Estate Administration

2. Wills, Trusts, and Estates Administration, 3e Herskowitz 2 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Learning Objectives  Understand an overview of the probate process  Learn how a small estate is settled  Understand ancillary administration and when it is necessary  Learn the paralegal’s role in the probate process

3. Wills, Trusts, and Estates Administration, 3e Herskowitz 3 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. What Is Probate?  The formal settling of the decedent’s estate  Three phrases of the probate process 1. Pre-probate  locating the decedent’s will 2. Actual Probate  filing the will with the probate court  testamentary letters issued to personal representative  notification of beneficiaries or heirs 3. Estate Administration  the representative collects decedent’s property and pays debts and taxes  the remaining property is distributed to the beneficiaries

4. Wills, Trusts, and Estates Administration, 3e Herskowitz 4 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. What Must Be Done First?  Obtain the death certificate  Open the decedent’s safe deposit box  Find the will, if it hasn’t been already!  Petition the probate court for a family allowance, if necessary  Petition the court for guardianship of minors before the will is probated, if necessary

5. Wills, Trusts, and Estates Administration, 3e Herskowitz 5 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Small Estate Settlement  When an estate’s value is “small,” as defined by statute, then a summary administration may proceed …not all states have a summary administration  Summary administration is more informal and much quicker than typical estate administration  State law controls whether the representative must give the typically required notification to interested parties

6. Wills, Trusts, and Estates Administration, 3e Herskowitz 6 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Formal Probate Administration: The Petition  The petition for administration must be filed by the executor or by the next of kin if the decedent died intestate  The petition must state important personal information about the petitioner and the decedent, such as:  address  domicile  date of death  value of estate

7. Wills, Trusts, and Estates Administration, 3e Herskowitz 7 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Notice To Interested Parties  The personal representative must file a notice to all interested parties after the petition for administration is filed  An interested party is anyone who could be affected by the outcome of the probate process  Such as…  beneficiaries  creditors  debtors  Notice may be given by mail (requiring a signature) or by newspaper publication

8. Wills, Trusts, and Estates Administration, 3e Herskowitz 8 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Proving The Will  Remember, a self-proving will avoids this necessity  Otherwise, witness testimony is generally required to establish the testator’s competency and the validity of the will … either by affidavit or in person  If a required witness is outside the jurisdiction, a special commissioner might be required to certify that witness’s affidavit

9. Wills, Trusts, and Estates Administration, 3e Herskowitz 9 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. The Bond And The Testamentary Letters The Bond  Remember, the representative isn’t always required to post one:  the jurisdiction might not require one  the will can specifically excuse it  all beneficiaries can agree to waive the bond requirement Testamentary Letters  Also called letters of administration  Granted by the probate court, this gives the representative the authority to act

10. Wills, Trusts, and Estates Administration, 3e Herskowitz 10 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Inventory  The representative must conduct a detailed inventory of the decedent’s estate  The inventory must specifically list the items in the estate (description, serial number, etc.)  The inventory must also value the property, which will require professional appraisers or accountants

11. Wills, Trusts, and Estates Administration, 3e Herskowitz 11 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Estate Expenses, Debts, And Taxes  The decedent’s valid debts and taxes must be paid by the representative from the estate’s assets  This may require liquidating some hard assets if there is insufficient cash  The priority of claims to be paid includes:  costs and expenses of administration  funeral expenses  debts and taxes with federal preference  medical and hospitalization expenses  debts and taxes with state preference  other creditors’ claims

12. Wills, Trusts, and Estates Administration, 3e Herskowitz 12 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. The Final Accounting  Is required to be filed after the estate has been distributed to the beneficiaries, according to the will or the intestacy statute  Is a report of all transactions occurring during the administration  Can be waived by the beneficiaries  Is equivalent to the “petition for discharge,” in some jurisdictions

13. Wills, Trusts, and Estates Administration, 3e Herskowitz 13 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Ancillary Administration  What is it?  probate proceedings occurring in a jurisdiction where the decedent owned real property but not where the decedent was domiciled  Why does it occur?  since the probate court of decedent’s domicile lacks jurisdiction over the real property located elsewhere, that probate court can’t transfer title to that property

14. Wills, Trusts, and Estates Administration, 3e Herskowitz 14 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. The Paralegal’s Role In The Probate Process  Helping the representative locate the will  Arranging the meetings between family members and other beneficiaries  Helping the representative administer the estate, including notifying relevant parties  Helping the attorney with document preparation and filing, including tax documents