Probate Estates

Most states have three different categories of probate estate procedures: administrative, intestate and testate (wills), which apply in different circumstances.

Administrative Probate

Administrative probate (often called small estate) is available for simple estates with limited assets. The actual asset value (or probate threshold amount) varies by state. The estate is probated by filing an affidavit (usually a court-provided form) without any hearings or other process. Administrative probate is intended to make closing smaller or simpler estates faster and less expensive than a traditional probate estate. Administrative probate is often used for estates consisting solely of personal property, a vehicle and/or a bank account.

Intestate Estates

Intestate estates occur when a decedent died owning property is his / her name without leaving a valid will. The estate administration process is provided by the state’s Probate Code. To begin, the interested party named in the statute (usually a spouse, child or other relative) will petition the probate court to be named as the Administrator of the estate. The decedent’s assets are distributed according to the provisions of the state’s “decent and distribution” laws. Essentially, all of the decedent’s property will be given to his/her closest living relative. Charities, friends and other non-relatives are not possible beneficiaries of an intestate estate. Intestate statutes are very inflexible and often cause results contrary to decedent’s wishes, especially in non-traditional families.

Testate Estate (Wills)

If decedent had a valid will, his / her probate estate would be called a testate estate. Like an intestate estate, a testate estate requires the opening of a probate case. The probate court will name a personal representative (also called an executor), usually person named in decedent’s will, making him/her responsible for managing the estate’s assets, paying the estate’s expenses and distributing the remaining assets according to the provisions of decedent’s will. A personal representative may be required to post a bond. A non-resident personal representative will likely be required to hire an attorney and name an in-state registered agent.

Estate Administration

A testate estate can be supervised or unsupervised. A supervised estate means that the personal representative needs court approval for many actions / transactions. The vast majority of estates are unsupervised, meaning that personal representative does not need the court’s permission to make decisions and execute typical transactions, such as selling real estate. At the start of the administration process, the personal representative needs to prepare an inventory of the estate’s assets and liabilities and file it with the court. This report generally includes the names and contact information for the estate’s beneficiaries. This inventory includes all of the assets and liabilities which are the personal representative’s responsibility.

The Personal Representative also needs to send a notice to all known creditors and post a notice in the newspaper of estate being opened and the applicable claims period for any unknown creditors. Creditors have a fixed period of time, usually 90-180 days, from date of notice to file a claim. Any creditor seeking payment of a debt needs to file a Notice of Claim within that period. Any claims not filed within that period are barred. If personal representative agrees that a claim is valid, it can be paid if sufficient assets exist. If insufficient assets exist to cover all claims, the Probate Code will provide an order of preference. If personal representative disputes a claim, a court hearing will be held to determine its validity.

If estate is open for more than 12 months, personal representative will need to send a status report to the court with an explanation of why the estate has not been closed. Personal representative will need to repeat this process for each year the estate is open. Court may schedule a hearing if it feels that personal representative is not diligently working to close the estate within a reasonable time.

Closing the Estate

Once the estate’s debts and expenses are paid and the applicable claims period has passed, personal representative can begin the process of closing the estate. To begin closing the estate, Personal Representative sends another report to the Probate Court which includes estate’s assets, debts, claims and expenses paid and any completed distributions to the beneficiaries. Report will also request approval of the distribution of remaining estate assets to the beneficiaries. After court approves the report, the personal representative will make the final distributions to the beneficiaries and request that court close the estate. The court will then issue an order closing the estate.

Note: The above information is for general information purposes only. The exact process in your state may differ. You should consult a licensed attorney with any questions regarding the estate settlement process in your estate.

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