As an estate administration attorney, I understand that settling an estate can be complicated. For that reason, it is important to understand the steps involved in petitioning the court, properly alerting beneficiaries named in the Will, and distributees entitled to a share of the estate when there is no Will. However, once an someone is appointed as the Administrator or Executor of an estate, it is only the beginning of their job.
Settlement of an estate has several phases. There are four basic functions to be performed by a fiduciary such as an Executor and Administrator. These functions are: (1) obtaining a tax identification number and opening an estate bank account (2) discovering and collecting estate assets, (3) paying debts, expenses and taxes; and (4) making distributions of the net estate to the proper beneficiaries or distributees. While these functions may appear to be straightforward, each one may pose several difficulties.
For example, closing a decedent’s bank account and depositing the funds into an estate bank account may not be complicated. However, when a decedent’s account was improperly closed prior to death or even right after death by someone using a Power of Attorney, the Administrator or Executor may need to recover those funds from the wrongdoer by bringing a Turn Over Proceeding.
If the decedent didn’t keep good records, it may be difficult to find all the assets or determine all the debts. The assistance of an attorney may be helpful in tracking them down. It is also a good idea to check with the State’s unclaimed property website. If some claims that they were owed a debt by the decedent that may not documented or verifiable, it may be necessary to oppose the claim to protect the estate’s interests. That may result in litigation.
Making distributions of estate assets to beneficiaries may be complicated when the beneficiaries do not agree as to the amounts they are to receive. Beneficiaries may dispute the actions taken by the estate fiduciary, claiming that the fiduciary did not perform their duties properly. That can be personally dangerous to the fiduciary, who may be charged with fraud. Such claims or objections are typically presented in an Estate Accounting Proceeding, where the fiduciary must present a full financial accounting of all transactions that took place during the course of the estate administration. The beneficiaries will have a right to review all of the transactions as well as all of the bank statements and other papers used to prepare the Accounting. If a fiduciary is unprepared, there will be problems.
When closing an estate, it is important to get releases from all the beneficiaries before making distributions. Otherwise, the fiduciary can be held financially responsible. When a beneficiary refuses to release the fiduciary, court intervention may become necessary.
These are but a few of the potential complications in a process that can be confusing at a time when you are still dealing the loss of a family member or loved one.
If you need help with Probate or Administration, we are here to help. Give us a call.