A probate is not necessary in all cases. Whether a probate is needed depends on the circumstances in a particular case. It is not possible to predict prior to a decedent's death whether it will be necessary to open a probate.
Assets are property owned by the Decedent and include cash, bank accounts, certificates of deposit, stocks, bonds, mutual funds, IRA's, pensions, cars, boats, homes, vacant land, vacation properties, etc. Probate assets are assets that are held in the Decedent's name alone or in the name of the Estate and must be collected by the Personal Representative and distributed from the Estate. The Personal Representative has a duty to safeguard and preserve assets, including but not limited to closely watching brokerage accounts, insuring and securing real property, and closely monitoring and evaluating all other assets.
The Decedent's debts may include: credit cards, utility expenses, medical expenses, promissory note obligations, household expenses, and fees for attorneys, accountants or other professionals. It is the responsibility of the Personal Representative to account for all assets belonging to the Estate and to pay all of the Decedent's debts.
Furthermore, the law requires that notice of the Personal Representative's appointment and of the pendency of probate proceedings must be mailed to each Beneficiary and Heir within 20 days after the appointment of the Personal Representative. It is customary for the notice to include a copy of the Will if a Will is probated.
In order to determine and possibly eliminate a Decedent's debts, the Personal Representative will file and publish a "Notice to Creditors." In addition, the Personal Representative must give written notice to all reasonably ascertainable creditors. Claims for debts incurred prior to the Decedent's death must be filed within four months following the date of publication of Notice to Creditors or within 30 days from the date written notice was given to any known creditor, whichever is later, or the debt will be barred, and the creditors will have no right to recover.
The Personal Representative is required to prepare an inventory of the assets of the Estate within three months from the date probate is initiated. The Personal Representative is entitled to receive compensation for services rendered in connection with an Estate. This is an hourly rate.
The Superior Court may have a large or small role in the administration of an Estate depending on whether the Personal Representative is awarded non-intervention powers. After finding that an Estate is Solvent, the court may grant a Personal Representative nonintervention powers. This means the Personal Representative will be able to manage the assets and liabilities of the Estate without specific authorization from the court for each action. This does not give the Personal Representative the authority to change the bequests given by the Decedent's Will or to act in a way that is harmful to the Estate.
If the Estate is not Solvent or the court does not grant the Personal Representative non-intervention powers, the court will supervise all activities of the Personal Representative. In either case, the court will appoint the Personal Representative, the court may have an active role in closing the Estate and if questions arise in the administration of the Estate, the court may assist in answering the questions. Being a Personal Representative is a very sensitive position that must be carried out with the utmost regard for the welfare of the entire Estate and all beneficiaries.
The time frame for administering an Estate is different in each case. In general, if the Estate is not taxable, it takes 5 - 9 months to complete the Estate. If the Estate is taxable, it generally takes 18 - 24 months to complete the Estate. Once all of the taxes are paid, the tax closing letters are received, the assets are distributed, the liabilities are paid, the decree of distribution is completed, and all the receipts are filed with the court, the court will close the Estate and discharge the Personal Representative. We recommend that a CPA be involved in all questions about Estate tax obligations.
This information was prepared as a public service by Mullavey, Prout, Grenley & Foe LLP. It contains general information and is not intended to apply to any specific situation. The information is very broadly and simply stated. There are a number of exceptions and specific rules that apply to your particular situation and lead to a different result. If you need legal advice or have questions, you should consult a lawyer.