Monday, January 27, 2014

A Note to Future Administrators/Executors of Estates

You may or may not know that you will be an administrator or executor for an estate.  Let's put that in simple terms: you may or may not know that you will be in charge of dealing with your parents'/siblings'/friends' property when they pass away.  If you know, READ THIS.

If you don't know, talk with your family and close friends.  Find out if they have a will or trust in place and if you are named in the will as the person in charge of dealing with their property (administering their estate).

While it is not a fun topic to think about or discuss, you should be meeting with an attorney NOW.  I know, from personal and professional experience, that the probate process can be complicated.  Probate, by the way, is the process by which you account to the state and heirs for the property that the person who passed away left.  This will outline some of the major issues you may run into with probate.  Please note that probate is a complex topic and cannot be fully explained in one article. However, if you think you may be involved in this process at some point in the future, it would be in your best interest to talk with an attorney extensively to prepare for that process now, rather than later.  The later you wait to understand what all is involved, the more complicated the process will be and the more room there will be for errors.

Probate requires a full and complete accounting of all property left by someone who has passed away.  The process begins by "qualifying" as an administrator or executor.  This means signing an oath that you will accurately report and distribute property and in most cases, posting a bond to ensure that oath.  Once you have qualified, you have a certain period of time to deliver an "inventory" to the Court (or appointed body known as the Commissioner of Accounts).  This is a full listing, including values, of them property left by the person who passed away.

After the inventory, you will have to file "accountings", showing the Court or Commissioner of Accounts (and likely all heirs) how the value of that property has changed (yes, this means if a savings account earned 12 cents, you have to let everyone know) and show any property that has been distributed (i.e., Mom's will said your sister gets the piano, you have to show that you have transferred the piano to your sister).  This typically has to be backed up with bank records, receipts, etc.

Once all property has been distributed, a "final accounting" will be filed, in which you show the Court or Commissioner that all of the property has been distributed and the value of the "estate" (that vague entity that, in an oversimplified definition, means property owned by the person who passed away).

Throughout this process, certain people can object to your accountings (most likely heirs) and if not properly done, the Commissioner of Accounts or Court can reject your accounting and make you try again.  There are also other things that should be done during probate such as a "debts and demands" hearing and a "show cause against distribution" but we will leave those topics for a future post.

As I've outlined briefly above, the probate process can be extremely difficult and complex.  The more you know about the process and the property you will be in charge of distributing beforehand, the more prepared you can be and more you can ease the process of probate.  If you would like more information on the probate process and a consultation on what to expect, or help navigating through the probate process, please contact us at (804) 447-0146 or