probate questions

[tractorguy]

My father in law just passed away at 90 and I will be helping the family get his house in order to make sure my mother in law doesn't have to worry about financial issues. He essentially took care of all of their finances. His widow knows where the ledgers are but doesn't know any details and isn't ready emotionally or otherwise to deal with anything.

Are there any websites equivalent to the boglehead wiki that can give guidance on things to worry about? I'm planning to suggest to the family that we leave everything alone for several months to a year but need to make sure that all medical benefits, taxes, SS, etc. are handled properly. I've never done this before and would like a checklist/advice from some experienced people who aren't out to increase their billable hours or commissions.

Thanks in advance.

[chaz]

Check with the estate executor.

[NAVigator]

If you are the executor for the estate, I would recommend this book; "How to Settle an Estate", C.K. Plotnick, S.R. Leimberg.

Jerry

[tractorguy]

The Estate executor is one of his daughters who also has never dealt with this before. We're going to talk to the family lawyer after Thanksgiving. The family is prepared to follow his advice but I am not by nature comfortable with just handing problems over to someone I don't know without some idea of what should happen.

[JDCPAEsq]

I'm planning to suggest to the family that we leave everything alone for several months to a year...

This would not be good advice. There are matters that need attention rather quickly and could result in needless waste or expense if not given attention. Have you located a will? The will will name an executor who is responsible for administering the estate. It is very possible the estate can be administered with little or no cost depending on the nature of the assets, liabilities and how the assets are held.
John

[JDCPAEsq]

The Estate executor is one of his daughters who also has never dealt with this before. We're going to talk to the family lawyer after Thanksgiving. The family is prepared to follow his advice but I am not by nature comfortable with just handing problems over to someone I don't know without some idea of what should happen.

The daughter is the one responsible for administering the estate. She has no obligation to serve as executor if she doesn't wish to do so. She would not be "handing problems" over to the lawyer. It is the lawyer's job to represent the executor in legal matters in connection with administering the estate. She can choose any lawyer she wishes.
John

[jb9]

Perhaps this doesn't need to be stated, but I would suggest that you use a lawyer that specializes in Probate. When I had to settle an estate in my family, I used an attorney who actually didn't know what he was doing. I regret the decision to this day. I ultimately had to intercede with the courts to get the estate closed. The lawyer was incompetent and I still may end up reporting him to the state bar association. Not all lawyers do probate and understand the state laws that surround it.

[chaz]

Perhaps this doesn't need to be stated, but I would suggest that you use a lawyer that specializes in Probate. When I had to settle an estate in my family, I used an attorney who actually didn't know what he was doing. I regret the decision to this day. I ultimately had to intercede with the courts to get the estate closed. The lawyer was incompetent and I still may end up reporting him to the state bar association. Not all lawyers do probate and understand the state laws that surround it.

You can sue for legal malpractice.

[Default User BR]

YOU should not a thing with any probate matters. Do not pay any bills. Do not attempt to access any of the deceased's accounts. The executor is the only one authorized to do so, but ONLY after being officially appointed as the "personal representative". The named executor needs to get the will registered and letters of appointment generated by the probate court.

Most states have a "small estate" limit. The executor needs to get an estimate of the size of the assets that will be distributed through probate. That will determine the path the probate will take. I agree that the executor should not wait to get started. A full probate will take a long time regardless, waiting won't help anything.

If you or anyone else was named as a beneficiary or a transfer-on-death recipient on an account, that's a different matter. Those are not part of probate. The individual needs to obtain a copy of the death certificate and contact the custodian.


Brian

[Rupert]

A week-long cooling-off period is a good idea, especially since it's a holiday. But next week you should sit down with the family lawyer and the executor of the will and discuss whether the will needs to be probated at all. Not every estate needs to be settled by a probate court. Avoiding probate is the whole point (or at least a major point) of estate planning. Make sure you get lots of certified copies of the death certificate. You'll need them for everything -- to close credit-card accounts, to get access to non-joint bank accounts, to make claims on behalf of beneficiaries, etc. One thing you can do to help before you meet with the lawyer is start making a list of all the institutions you'll have to contact to close and/or transfer ownership of accounts. Also, find out if the wife is joint owner of all bank accounts and cars, etc. If she is, it'll all be a lot easier.

[JDCPAEsq]

A full probate will take a long time regardless...

A full probate doesn't necessarily have to be long or expensive. I've wound up full probate administrations in a few months at very little cost.
John

[JDCPAEsq]

Avoiding probate is the whole point of estate planning after all.

More accurately, avoiding probate may be one point of estate planning. Avoiding probate is not necessarily desirable such as in the situation where there may be outstanding claims against the estate that need to be extinguished by publication.
John

[bsteiner]

In most cases, probating the Will not difficult, expensive or burdensome. It's usually a very small part of the estate. To probate a Will, the lawyer brings or sends in the Will together with some forms, a death certificate, and a check for the filing fee (usually $1,250 in New York, a few hundred dollars in New Jersey or Florida).

The executor has the short-term job of collecting the assets, paying the debts and expenses, dealing with the assets (deciding which to sell and which to distribute, and dealing with the sales), filing the tax returns (usually an accountant prepares the final income tax return, usually an accountant prepares the estate's income tax returns though some lawyers do these, and usually a lawyer prepares the estate tax returns, though in each case it's up to the executor), and then distributing the assets to the beneficiaries. A family member can usually do the job with assistance from the lawyer.

Each estate is different. Most are some work but are reasonably straightforward. In most estates, the largest part of the work is preparing the estate tax returns, including gathering the necessary information. However, some estates are difficult or complicated. Often there are disclaimers (where a beneficiary disclaims (waives) some or all of his/her inheritance). Sometimes the estate tax is not resolved on audit, and the case goes to an administrative appeal within the IRS (and to court if it's not settled there). Sometimes there's a Will contest, or a dispute among beneficiaries.

[Spirit Rider]

I have been the the executor of three estates in two different states They have had a range of wills/no wills, simple assests and distribution - comlplex assests and distribution, and different complexities of state laws and probate court procedures.

I reccomend that the executor and you (if and only if she welcomes your assistance) take the long Thanksgiving weekend and document exeactly what the "complete" list of estate assets and assests that trasfer outside the scope of the probate (benificary accounts (insurance, retirement accounts, financial accounts), jointly held real and presonal property property, etc...) Note: you will need to do this however you move forward.

I also suggest you go online and try to determine the probate rules, procedures, and forms in the state. Here again even if you retain a lawyer to do all probate activities, it makes sense to know what you are hiring them for. Then I would then try to determine some of the issues to determine the deliniation of probate activities between the executor and professionals (lawyer, accountant, retirement specialist, etc...)

1. How savy in financial matters is the executor or can be with assistance.
2. How much desire, patience, and time will there be to dedicate to the probate process. It will be frustrating
3. How complex will the assets be that fall witin the scope of the estate
4. What will the rough size of the estate be (five figures, six figures, seven figures (<$5M or >$5M).
5. How complex are the probate court's rules, procedures and forms.

From these issues and an initial meeting with the lawyer the executor (and input she values ) can determine the course of action.

A. Do it completely without professional representation. The court clerks can be very helpful. The state like mine may have a brochure detailing all the steps. I do not reccomend this course of action for anything other than a simple administration.

B. There is much of the process that involves research (reviewing statements, many phone calls, and online activities), completing of forms, notices and mailings to beneficiaries and others, and legwork supporting the above and vistits to the probate court. Except in the case of disputes or complex issues, you will probably never see a judge or have a hearing.

The executor can do most of this busy work and retain a lawyer for consultation and document review. It also, makes sense if there is a family accountant, they assist in filing the decedents last tax return and the estate tax return. Finally, it is important that any retirement accounts are handled properly. Make sure RMDs are taken for this year and any beneficiary transfers happen next year.

C. Finally, you can retain a lawyer for a turnkey probate service. This can be expensive, but there are usually state bar guidelines, or court guidelines, or even state laws governing what can be charged. This may be wise if there is some combination of disputes/challenges, complex probate rules, complex estate, and significant money involved.

The key here as others have said is to get started early and get the probate process moving. In all three of the estates I was involved in the glacial pace of the probate court was the biggest frustration.

[Default User BR]

A full probate will take a long time regardless...

A full probate doesn't necessarily have to be long or expensive. I've wound up full probate administrations in a few months at very little cost.

Things vary by state. The Missouri probate guide says:

The earliest that an estate may be closed and distribution made to the heirs or beneficiaries is approximately six months and 10 days after the date of first publication.

That's because Missouri has a statutory six-month period for claimants to apply to the court. There are two publications required. And that's the time following first publication. There was plenty to do before as well, filing the will, establishing residency (my mother had passed away in another state), getting personal a representative appointed, that kind of thing.

Our case was further complicated by the estate including real estate in another state. Kansas wouldn't even start an ancillary probate until six months after Missouri probate was initiated.


Brian

[bsteiner]

The lawyer generally handles the estate tax return.

[JDCPAEsq]

The lawyer generally handles the estate tax return.

Depends on who is the personal representative. Corporate trustees usually prepare it themselves, many are done by CPA's, some PR's prepare them and the lawyer may do them.
John

[bsteiner]

I agree that it depends, but by "generally" I meant that lawyers probably handle the estate tax returns about 90% of the time. There are lots of issues that we're used to dealing with that nonlawyers usually aren't. The IRS people who audit estate tax returns are all lawyers.

We do the estate tax returns even where a bank is the executor, though the bank will review it more closely than an individual executor.

Occasionally an accountant will do the estate tax return, though in those cases we want to review drafts along the way, and we want to be involved in the decision making.

Of course, the decision is up to the executor, who is, after all, our client.

[Dale_G]

Of note - many states permit lawyers involve to charge "reasonable fees" - often 3% of the estate. Fees are almost always negotiable however. If possible, executors should always negotiate fees based on the amount of expected work - not on the size of the estate.

Dale

[Default User BR]

Of note - many states permit lawyers involve to charge "reasonable fees" - often 3% of the estate. Fees are almost always negotiable however.

Some states, like Missouri, have a statutory amount (a graduate scale of percentages of the probated amount) for the attorney. My experience was that lawyers would NOT negotiate that here. The same also applied to the executor, although I declined it.

I believe that for "small estates" the statutory fees did not apply and the fee would be an hourly rate or some other negotiated amount.


Brian

[Stuart01]

Just wanted to stress that, if not a large complex estate, the executor can probably complete the process without the hassle and expense of an attorney. I've done two in Florida for family members and in the middle of one for Maryland. Lawyers like to do these, of course, since they are generally easy and they can make some money, but they are often not needed.

At least here in Maryland, probate for a small estate is nicely defined and generally easy for an individual executor (called the personal representative in MD).

Best of luck to you and your family.

[johnep]

Just wanted to stress that, if not a large complex estate, the executor can probably complete the process without the hassle and expense of an attorney. I've done two in Florida for family members and in the middle of one for Maryland. Lawyers like to do these, of course, since they are generally easy and they can make some money, but they are often not needed.

At least here in Maryland, probate for a small estate is nicely defined and generally easy for an individual executor (called the personal representative in MD).

Best of luck to you and your family.

I was executor of my mother's estate which was considered a small estate. I only used lawyer once to review the process to make sure i did everything correctly. Everything went pretty well except my siblings did not like the way I handled certain matters(which I did according to attorney recommendation). and it resulted ins strained relations for a while. I believe if an attorney had been more involved, those issues could have been avoided, at least among the siblings. So to avoid fracturing family relationships, it might be worth spending a little money to have an attorney guide the process. I have actually seen that reason listed as one of reasons to use an attorney for estate administration. It now makes sense.

[tractorguy]

Thanks to all for all the advice and suggestions. The executor is scheduling a meeting with a lawyer to find out what the process is so we can decide what to ask him to do and what to do ourselves. She's invited me along.

It's a simple will and estate. The house, a few funds, and CD's are all left to Mom. Most everything was jointly owned. I'm pretty sure the value of the estate is low enough that taxes won't be an issue.

I've sent the executor a link to this thread.

[exoilman]

reference