No Assignments this week!!Just the Discussion board!!

• Yay – no Homework!!!!

There is a quiz – so make sure you take your quiz!

• Please remember to….

Welcome to week #7! :-)

• This week is a normal week….meaning no papers are due… so just stay on top of the Discussion Board and do your postings….and make sure to take your Week #7 quiz!!

• Last week we focused on Wills and drafted a Will Agreement. This week….we will begin discussing Estate and Probate Administration.

What did you guys think of the Week #6 Will assignment?

• It was a little more detailed than the Trust Agreement….

• But I am sure you guys were all on the right track with everything….

Let’s get started….

• When a person dies, it is the obligation of his or her personal representative or next of kin to see that the estate is administered according to the estate laws of the state in which the decedent owned property.

• By the way – I will be referencing examples from our textbook tonight….

What exactly is probate?– Probate is when the court supervises the processes that transfer legal title of

property from the estate of the person who has died (the "decedent") to his or her beneficiaries.

Usually, you have to fill out court forms and appear in court to: – Prove to the Court that the Will is valid (this is usually routine),

• Appoint a legal representative with authority to act on behalf of the decedent,

• Identify and inventory the decedent's property, and have that property appraised,

• Pay debts and taxes, and • Distribute the remaining property according to the terms of the Will or to

the decedent's heirs.

The process of Administering an Estate can be divided into three broad categories….

• 1) pre-probate obligations• 2) the actual probate process• 3) the distribution and winding up of the

estate

Pre-Probate

• The pre-probate concerns of a legal assistant are to locate all wills executed by the decedent, arrange for a family conference (if needed), to explain the administrative process to the family, and to assist the attorney is providing for the operation of any business that the decedent was responsible for….

Pre-probate Process• When a person dies, automatically all of his or her bank

accounts, brokerage accounts, and other property are sealed pending orders from the appropriate court authorizing a personal representative to deal with the decedent's assets.

• The accounts and property are frozen in order to protect the government and creditors of the estate.

• Many times these assets are either jointly held or are used to support a family, and prior to letters being issued by the court some access to this property may be necessary.

• It is the responsibility of the attorney and paralegal to see that interim authorization is granted by the court.

• In order to obtain the authorization, several documents must be obtained and prepared

Probate Administration….

• The probate administration of the estate involves petitioning the court for Letters authorizing the personal representative to act on behalf of the estate, regardless of whether the decedent died testate or intestate. The paralegal is responsible for notifying all parties who have an interest in the estate that a petition for administering the estate has been filed with the probate court, and, if any will contest is noted, to assist the attorney in the preparation of the defense of the estate.

Distribution of the Estate….

• The largest and last phase of estate administration concerns gathering all of the decedent’s assets, determining all liabilities, and seeing that all taxes and debts are paid.

• In most cases, the person requesting appointment as personal representative (executor or administrator) hires an experienced probate lawyer or estate administration attorney to prepare and file a Petition for Probate.

Finding the Will

• The “responsible party” and an objective direct family member(s) should start an organized search for the Last Will and Testament of the deceased. If the Will is easily discovered the dated date of the document should be noted as well as the decedent’s signature page.

• The first Will discovered may or may not be to Last Will and Testament or the document may not have been fully executed and may be deemed invalid. So keep looking. There can only be one original Will. Copies may be helpful and should be retained but the original is required for prima facie evidence that an Executor or Personal Representative is named.

Places to Look for Will

• Among personal papers at residence(s) • Call the attorney’s office who drafted the Will • In a safe deposit box at a financial institution • Upon discovery of the Last Will and Testament the

named Executor or Personal Representative must take physical possession of the document. With the Will and a certified copy of the death certificate the executor will file for letters of appointment or testamentary.

What are death certificates?

• They are the official documents issued by the state Department of Health or local health authority as proof of the death of its citizens. They are usually issued shortly after the death, unless and autopsy is required.

Here is a link for all 50 states – for where to request a death certificate….

• http://www.estatesettlement.com/vitalstats.php

What is an Autopsy?

• Autopsies are required if the decedent dies under violent circumstances, by misadventure, or circumstances that are not readily ascertainable (such as a person who is ill with several medical problems and the exact cause of death could be any of the diseases). Obtaining copies of the death certificate is important because it is necessary as proof of death for the Court.

• Let’s look at the example on the bottom of page 191 of our textbook….

Death Certificate filing….• The death certificate, which includes the date and cause of

death, is completed by the family's physician, medical examiner, or the funeral director. It is then filed with the appropriate governmental agency with a copy provided to the decedent's family.

• The decedent's family may need to obtain several additional certified copies of the death certificate to be used when transferring the decedent's property to the legal beneficiaries. In the formal administration of an estate, the death certificate must be filed with the probate court within a set period of time as prescribed by state statute.

Petition to Open a Safe Deposit Box….

• There are two circumstances in which the court will be asked to permit the opening of a safe deposit box….

• 1) The will of the Decedent cannot be found• 2) and if the Decedent shared the safe deposit box with

someone else and the other person shows that they need something from it. (Money & Jewelry are not considered important enough to open the safety deposit box). If the Court grants the request to open the safety deposit box, then the box must be opened in front of representatives from the bank and the state taxing authority, and the only item that may be removed from the box is the will or property specified in the court order.

• Check out the example on the bottom of page 193….

Petition to Search….

• If the will is not found in the safe deposit box, it may be necessary to search other property of the decendt, such as an office or apartment.

• There is an example on the bottom of page 195….

The official administration of an estate begins with the filing of a petition for probate with the appropriate court….

• The Petitioner is the one who is requesting to be appointed as the personal representative of the decedent.

3 types of Probate may be permitted.

• 1) Summary probate proceedings• 2) Formal probate proceedings• 3) Informal probate proceedings

Summary Probate Proceedings….

• They are permitted in certain jurisdictions when there is only one will filed, no will contest, and a relatively small estate is involved.

A Summary Procedure is available under the following circumstances:

• (i) When the assets subject to probate are less than $50,000, in which case the assets may be transferred from the decedent to the beneficiaries through an affidavit executed by a beneficiary;

• (ii) When the administration involves the transfer of an isolated piece of property or the resolution of a specific issue, in which case the probate court may appoint a special administrator to transfer the asset or resolve the issue; or

• (iii) When a will substitute such as a marital property agreement is used to transfer the decedent’s assets upon his or her death, in which case the transfer contemplated by the will substitute can be confirmed by the probate court through a summary confirmation proceeding.

The other two types of probate proceedings are formal and informal probate.

• The distinguishing feature between formal and informal probate is the level of court involvement.

• A formal probate is presided over by a Circuit Court Judge while an informal probate is supervised by a county register in probate.

• Typically, formal probate is more involved and more expensive. In some cases, an informal probate can be conducted without an attorney and without a court appearance.

• A formal probate may be required when the decedent’s will prohibits the use of informal probate or when the decedent dies without a will or with a will that fails to name a personal representative. Formal probate may also be required if there are contested issues concerning the will or the personal representative’s administration of the estate. Informal probate is preferable when a formal dispute resolution is not needed.

• Formal probate includes all of the steps of an informal probate with the additional requirement that the court must be kept informed of the process and must rule on contested issues and confirm all distributions.

Notice• All persons who have an interest in the estate must

be notified that a petition to administer the estate has been filed with the probate court. The persons who are “interested” are:

1) All intestate heirs2) All persons named in the will and codicils (if they

exist)3) All creditors4) All persons who were named in earlier will and

codicils (if they existed) * There is an example on the bottom of page 211.

More info. on Notice….

• The probate lawyer, or the petitioner arranges to mail notices to everyone named in the decedent’s Will (when there is a Will) and all his/her legal heirs about the death and the probate hearing.

• The notice must also be published in the newspaper where the decedent lived to let creditors know about the hearing.

• Notice gives everyone notified an opportunity to object to admitting the Will and to the appointment of the executor, personal representative.

Probate Hearing

• The purpose of the hearing is to prove the validity of the will or the fact that no will exists.

• If someone does challenge the petition, a court date will be set for a complete hearing on the matter.

• A probate hearing has all of the formalities of a trial, and the paralegal must assist the attorney in all of the litigation preparation.

• If no challenge is noted, the court will sign the orders granting the petition and authorizing the Letters.

• There is an example of page 218….

The hearing usually takes place several weeks after the matter is filed. The purpose of the hearing is to determine the validity of the Will and to appoint the executor, administrator or personal representative.

Sometimes, the Court will need the people who witnessed the decedent's signature on the Will to sign a declaration.

If there are no objections, the court will approve the petition and appoint the personal representative.

The personal representative must identify, take possession of, and manage the probate assets until all debts have been paid and tax returns filed. This process usually takes about a year.

Depending on the terms of the Will (if there is a Will), and on the amount of the decedent's debts, the personal representative may have to sell real estate, securities or other property.

For example, if the Personal Representative, after paying the debts and taxes, the executor personal representative must file a report with the court. The report accounts for all income received and payments made on behalf of the estate.

The judge will then authorize the personal representative to divide the remaining property among the people or organizations named in the Will. Will makes cash gifts but the estate consists mostly of valuable artwork, the art may have to be appraised and sold to produce cash.

Or, if there are unpaid debts, the personal representative may have to sell some of the estate property to pay them.

After paying the debts and taxes, the executor personal representative must file a report with the court. The report accounts for all income received and payments made on behalf of the estate.

The judge will then authorize the personal representative to divide the remaining property among the people or organizations named in the Will.

The property is transferred to its new owners. The final estate accounting is completed.

Estate is closed after consultation with the attorney – and the Probate process ends.

ABA Model Rule 1.8: Conflict of Interest comes into play….

• Rule 1.8 prohibits a lawyer from soliciting or accepting a substantial gift from a client for him or herself or on behalf of a relative of the lawyer, either inter vivos or testamentary, unless the lawyer is related to the client. The members of the law office must be careful to avoid becoming major beneficiaries of a client’s estate; otherwise, the law office is looking at a will contest in the making….

Ready for some practice questions?

• I have a few tonight….

True or False?

• All probate proceedings require notice to be sent to interested parties.

False

That one is false!

True or False?

• A probate court never supervises the administration of a decedent’s estate.

That one is….

• False too.

Here are some short answer questions….

• How does a probate proceeding begin?

Answer:

• By filing a petition.

Short answer question….

• Who must be notified of a will being filed for probate?

The answer is….

• Intestate heirs, person named in the will, persons named in earlier wills.

Last question….

• There are several GENERAL duties that the personal representative needs to handle in the probate process – name as many as you can……

The duties of a personal representative generally include: (i) identifying and collecting all of the decedent’s assets subject to probate administration; (ii) managing the assets during the probate process; (iii) reporting the assets to the court and to the interested persons; (iv) liquidating enough assets to obtain a sufficient amount of cash to cover taxes, debts and expenses of the estate; (v) identifying and paying funeral and burial expenses as well as all enforceable debts, claims, taxes, and probate administrative expenses; (vi) determining the interest of the interested persons in the assets of the estate; and (vii) distributing the remaining assets to the interested persons according to the provisions of the will or, in the absence of a Will, State law.