Probate FAQs

What is Probate?

During probate, the Probate Court will determine whether your Will is valid. If your Will is determined to be valid, then the person whom you have named as Executor in your Will must petition the Probate Court to be appointed Executor of your estate. Once your Executor has been appointed by the Court, he or she may begin distributing your property according to the provisions of your Will. If a person dies without a Will, the process of distributing the person's assets according to state law is called Estate Administration. The person responsible for administrating processes may take several months depending upon the circumstances of the case.

What are the Responsibilities of the Executor?

The Executor must identify and locate all your assets so that such assets may be valued. Property requiring valuation includes stocks, bonds, life insurance, real estate, and any interest in a closely held corporation or partnership, among others. The Executor is responsible for paying expenses such as taxes, medical bills and funeral costs.

Additionally, the Executor and/or his professional advisors must determine whether final Federal and State income tax returns must be filed. The Executor might also have to file Federal and State Estate Tax Returns and Federal and State Fiduciary Income Tax Returns.

How Do I Minimize Estate Taxes?

The Federal Estate and Gift Tax rates range from 37% to 55% for estates valued over $675,000 (for the year 2001). Every person is entitled to an exemption against the Federal Estate and Gift Tax, which is scheduled to increase to $1,000,000 in 2006. The unlimited marital deduction allows each spouse to leave an unlimited amount of property to the other spouse without incurring any estate or gift taxes. It is important to contact a qualified Elder Law and Estate Planning Attorney to make certain all of the available tax planning tools are being used to your advantage.
 

Estate Administration FAQs

What is Estate Administration or Probate?

When a person dies having a Will in place, his or her Will must go through probate. During this proceeding, the decedent's Will is established as valid and an executor is appointed to administer the decedent's estate according to the terms of the Will.

Sometimes, the attorney and executor will encounter problems that hinder the administration of the estate. In unusual cases, a Will may have been lost or destroyed, or multiple Wills may be presented for Probate. Perhaps the Will was altered before or being signed by the decedent, or perhaps the decedent attempted to revoke the Will, but the revocation was not carried out properly. Sometimes a codicil to the Will contradicts the original terms of the Will to such an extent that it creates grounds for a Will contest.

What is the Role of an Executor?

The person named as executor of an estate takes on a vital role during the estate administration process. The executor's principal function is to settle and distribute the decedent's estate pursuant to the directions in the Last Will and Testament. This involves collecting the decedent's assets, converting a portion of the assets into cash to pay the decedent's debts, which might include estate taxes, and finally, distributing the net estate in accordance with the provisions of the decedent's Will.

Upon the appointment of the executor, the court will issue a Certificate of Appointment to evidence the appointment. The executor, as evidence of his or her authority to act, should retain the Certificate which generally consists of only one sheet of paper.

Before Making Distributions, What Must the Executor Consider?

Assuming none of the above-mentioned problems present themselves prior to or during probate, the executor must carefully consider the provisions of the Will before making any distributions. Some questions to ask include:

1. Does the Will contain specific bequests of property? Specific bequests should generally be distributed as indicated in the Will, unless the estate is insolvent.
   
   
2. Does the Will contain bequests of a specific dollar amount? Such bequests should be funded in cash, or if this is not possible, with property having a value equal to the dollar amount of the bequest on the date of distribution.
   
   
3. Does the Will establish any trusts? If so, what are the terms of the trust? Who is named as Trustee(s) of the trust?
   
   
4. Does the Will direct how estate taxes, if any, are to be paid?
   
   
5. Does the Will contain special compensation provisions for the executor?

The case requirements of the estate must be carefully considered too, as any debts of the decedent must be paid before distributions are made. Debts include, but are not limited to:

1. Administration expenses, including commissions, if applicable, attorney fees, disbursements, appraisal fees and filing fees;
2. Funeral expenses; and
3. Estate taxes.

Aside from monetary issues, the executor must consider the needs and wishes of the beneficiaries. Do the beneficiaries want any property in kind as opposed to the cash equivalent or a substitute item? Do they need immediate distributions of money to live on?

What is the Account?

Prior to being discharged from his or her responsibility the executor must account for the receipt of assets which were in the decedent's name alone at the time of death, any debts, funeral and administration expenses and taxes paid, distributions to beneficiaries, any balance remaining, any expenses not yet paid, and the balance of principal to be distributed after payment of final expenses.

The executor must also show receipts of income, expenses and taxes paid out of income, and the balance of income remaining to be distributed.

This accounting may consist of only a few pages, or it may consist of numerous pages depending upon the complexity of the estate.