After a loved one passes away, often there is a legal responsibility to manage the decedent’s financial and legal affairs. For example, everything they owned --- their house, vehicles, bank accounts, and personal belongings become part of their estate. Estate administration is the process of collecting these assets, paying off debts, and distributing what is left to the heirs.
There are two types of estates:
- Testate: Dying with a Will
- Intestate: Dying without a Will
Testate comes from the Latin word testatus, which means “having made a Will”. Intestate comes from the Latin intestatus, meaning “not having made a Will.” The formal legal process called probate which involves proving a Last Will & Testament is valid or not. On the other hand, if someone died intestate, following the rules of intestate succession. The person responsible for handling the probate of a Last Will & Testament is known as the personal representative or executor. If there is no Will, then the estate is managed by an administrator.
Did You Know?
The probate court must approve a person who applies to become executor or administrator. This qualifying process may require a bond, like a credit check with a security deposit, unless it is waived by the heirs or if the decedent stated in their Will that a bond was not required. The estate representative must also take an oath promising to act honestly.
What’s Next?
Once a personal representative is officially appointed, their role is confirmed by Letters Testamentary. Despite the name, these are not “letters” in the modern sense of the word. Instead, they are a formal legal document that certifies the authority to act on behalf of the estate. This legal document may be presented to banks and other financial institutions to prove the executor is legally authorized to manage the estate’s affairs.
The Work Begins
Once the court makes an official appointment, the estate representative is bound by a fiduciary duty—meaning the executor or administrator must act in the best interest of the estate.
An executor’s duties include:
- Inventorying assets
- Collecting and safeguarding the assets
- Opening an estate bank account
- Publishing notice to creditors
- Paying debts and taxes
- Filing forms and accountings
- Distributing any remaining assets
Getting Paid for Your Work
You may request a commissionof a percentage of the estate's value for your services and reimbursement of reasonable expenses such as postage and filing fees. This must be approved by the Clerk before distributing assets.
What If You Don't Follow the Rules?
If you fail to file required documents, the Court may:
- Remove you from the role
- Charge you with contempt, even jail time
- Hold you personally liable for damages or missing funds
Small Estates: A Simpler Process
This process may avoid court hearings and a lengthy estate administration. If the value of the decedent’s personal property is small (typically, estates $20,000 or less) you may be able to avoid full probate. Or, if the surviving spouse is the sole heir or beneficiary, they can often request a summary administration, which allows them to manage and close the estate without a full probate process.However, it is important to note that in these expedited probate scenarios, the spouse or the executor typically becomes personally responsible for any of the decedent’s debts up to the value of the estate.
Final Thoughts
Managing an estate is an important legal responsibility—but with the right information, careful organization, and with an experienced attorney’s guidance, probate does not need to be overwhelming.
If you are in need of assistance, the attorneys at Collins Family & Elder Law Group can help.
