Most people find news of a loved one’s death emotionally overwhelming. Your stress level may intensify when you discover that the deceased person’s last will and testament (the “Will”) names you as the estate’s executor. As executor, you may be the one person that helps keep all the pieces together as family members deal with the devastating loss. However, the deceased person (the “decedent”) would not have chosen you if they didn’t trust you to fill the role. Here’s more about the executor’s job, and what you can do to receive much-needed help with your responsibilities.
First Priority: Consult Legal Counsel!
A personal representative should consult an experienced attorney known for probate law mastery (also known as a “probate lawyer”), especially for managing large or complicated estates. There are a number of benefits to hiring a probate lawyer. Avoiding mistakes is key among them. Even minor mistakes can be costly. We will point out those risks throughout the article and conclude with tips about hiring a probate lawyer.
What Is A Personal Representative?
A decedent leaving a Will (referred to as a “testate decedent”) usually nominates a person in the Will as an “executor” to manage the decedent’s estate. When a decedent leaves no Will (referred to as an “intestate” decedent), a person may seek appointment by a court to serve as the decedent’s administrator. The term “personal representative” applies equally to an executor or administrator. The typical personal representative’s responsibilities include gathering the decedent’s property and possessions, paying their bills, and distributing remaining property and possessions to the estate’s beneficiaries (sometimes referred to as “distributees”). You may find the process overwhelmingly complex if you try to tackle it alone. However, an experienced estate lawyer can help streamline and manage the estate like a pro.
What Are Probate And Probate Administration?
The term “probate” refers to the legal process of presenting the decedent’s Will to the probate court and securing a court order accepting the Will as an official record of the court. However, when people use “probate” or “probate administration” (our preferred term), they usually mean the entire process of managing all issues of the decedent’s estate.
A popular myth about administration suggests that people should avoid probate administration because of its costs, time consumption, and other fictional issues. Although it may take months to resolve all issues in a traditional probate administration process and distribute property to distributees, many of those delays also exist outside of probate administration. Probate administration provides essential problem-solving in estates involving disputes by creditors or distributees. However, a savvy estate plan can transfer huge asset values automatically at death without a Will or an extended probate process.
Sometimes, a decedent’s estate does not require a prolonged probate administration process. Generally, you can use the Indiana probate statutes’ small estate administration process to transfer personal property (assets other than land, buildings, etc.) if the estate’s value is not more than $50,000 (Illinois has a similar system with a $100,000 limit). The simplified small estate administration uses affidavits to transfer property faster and less formally than the regular process.
Distributees can claim an unlimited value of a decedent’s real property (assets including land, buildings, etc.) without the formal probate administration process. However, the beneficiary cannot use the small estate administration process to claim personal property if the total value of real and personal property exceeds the $50,000 small estate administration limit (again, $100,000 in Illinois). In that case, distributees must either petition for formal administration or forfeit the personal property to claim the real property without probate administration.
We can illustrate Indiana’s real and personal property dilemma with an example. Suppose the probate property includes a $300,000 home and a $100 insurance refund check. In that case, it would not make sense to spend hundreds of dollars in filing fees and thousands of dollars of attorney fees to claim and deposit the $100 check, so the lawyer should advise the distributees to abandon the check.
While it may appear that the estate’s asset value exceeds small estate limits concerning personal property, some assets don’t count. The estate’s assets (commonly known as “probate property”) only include items that the decedent owned alone without beneficiary arrangements. Probate property excludes life insurance proceeds, pay on death accounts, property held in trust, and other items with specified beneficiary designations outside of the Will.
Personal Representative Appointment Process
Several factors affect a personal representative’s appointment process, including whether
- the decedent died leaving probate property;
- the decedent died testate;
- the decedent’s Will or distributees support unsupervised administration; and
- the personal representative resides in the decedent’s state of residence.
We will describe the appointment process and how these factors affect the process next.
Petition for Appointment
A personal representative’s appointment process in a testate estate begins with filing the Will and other documents in the Indiana probate court where the decedent resided. While the appointment process is similar for an intestate estate, any person without a felony conviction can petition for appointment as personal representative of an intestate decedent. To file the Will, a petitioner must file a petition to probate the Will (a specialized kind of lawsuit) and request the court’s appointment of someone to serve as the personal representative. Other required documents may include a personal representative’s oath of office, an affidavit of death, a proof of the Will, and other documents. In some cases (especially if the personal representative lives in another state), the probate statutes may require the petitioner to post a bond.
Kinds Of Estate Administration
A personal representative’s authority flows through the probate court from one of two sources: a testate decedent’s will or the probate statutes concerning an intestate decedent’s estate. In both testate and intestate estates, the court can appoint a personal representative to serve with or without court supervision.
In supervised administration, a personal representative must file a written inventory of all the estate’s assets and debts, ask the court’s permission for most major decisions, and file a detailed written report in the court about the personal representative’s actions.
If the court appoints the personal representative for unsupervised administration, the personal representative can manage the estate relatively informally and file a simplified closing statement with the court at the end of the case. To qualify for unsupervised administration, the court determines that the Will specifies unsupervised administration or that all the estate’s distributees have given written consents for unsupervised administration.
Although most people prefer unsupervised administration’s simplicity, wise lawyers use courts as referees in supervised administration if they expect disputes with or among creditors or distributees.
After the probate court judge signs an order approving a petition for appointment of a personal representative, the probate court’s clerk issues a certified document called Letters Testamentary for a testate decedent or Letters of Administration for an intestate decedent. In either case, the Letters are official proof of the personal representative’s broad legal authority you need to oversee and manage the estate, gain access to things like safe deposit boxes, and transfer or sell assets.
Personal Representative’s Duties
A personal representative owes a duty to act wisely, diligently, and honestly, and without favoritism toward, or prejudice against, any person. The duty prohibits a personal representative from seeking self-enrichment by using the estate’s assets for the personal representative’s personal benefit. The personal representative must make and report all transactions transparently according to the Will (in a testate estate) and the probate statutes for the benefit of the estate’s creditors and distributees.
Personal Representative’s Tasks
A personal representative’s tasks vary depending on the estate’s assets, debts, income, expenses, and any legal or practical issues requiring resolution. Common personal representative’s tasks include these responsibilities:.
- Contacting potential beneficiaries listed in the Will as soon as possible and informing them about the estate administration’s progress. An experienced probate lawyer will offer systems and procedures to streamline the personal representative’s informational responsibilities.
- Making a detailed inventory of all probate assets, including cash on hand, homes, antiques, art collections, boats or other vehicles, jewelry, collector’s items, the amount in bank accounts or certificates of deposit, and any other property owned by the decedent, including partial ownership interests. The inventory will also list all the decedent’s unpaid debts and expenses. An experienced probate lawyer will advise a personal representative to list all assets so the lawyer can help identify the necessary inventory items. The probate lawyer will advise the personal representative whether to include the following assets in the inventory’s list of probate property (some circumstances can require inclusion of each category):
- Life insurance policies
- Assets that are held in a trust
- Certain types of jointly-held property
- Accounts that are Payable on Death (POD)
- Property designated as Transfer on Death (TOD)
- Employer retirement, pension, or insurance accounts
- Listing all reasonably identifiable creditors. The personal representative should examine the decedent’s mail carefully for several months and add contact information to the list for any creditors appearing in bills, invoices, or collection notices addressed to the decedent. The probate lawyer will help the personal representative notify creditors and publish a general notice of the estate administration to creditors in the local newspaper. The notification gives non-governmental creditors a deadline to file claims in the probate court.
- Paying the decedent’s legitimate debts and the personal representative’s administrative expenses. The personal representative can take reimbursements and reasonable personal representative fees, and pay the probate lawyer’s fees under the lawyer’s legal services engagement agreement with the personal representative in unsupervised administration. However, the personal representative must seek court pre-approval of payments to the personal representative and the personal representative’s lawyer in unsupervised administration.
- Calculate any state or federal taxes owed, and file final tax returns for the estate. The probate lawyer will take primary responsibility for this work by either preparing the tax returns or coordinating with a tax advisor.
- Submit a closing statement to all beneficiaries, creditors, and to the court if needed. The probate lawyer will prepare the closing statement for the personal representative.
Hiring A Probate Lawyer
Experience and legal scholarship are essential attributes that a personal representative should seek in a probate lawyer. For almost three decades, Hawkins Elder Law has helped personal representatives, trustees, and guardians fulfill their administrative duties The firm’s lawyers also work year-round with their estate, trust, and elder law colleagues to study and propose improvements to the Indiana laws that affect their clients.
About the Authors
Jeff R. Hawkins and Jennifer J. Hawkins co-author this blog with Thomas E. Hynes, a lawyer admitted to practice in Pennsylvania, New Jersey and Florida who has a background in estate planning and elder law. Jeff and Jennifer are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers. They are also active members of the Indiana State Bar Association and the Indiana Chapter of the National Academy of Elder Law Attorneys (NAELA). Jeff is also a member of the Illinois NAELA Chapter.
Jeff is a Fellow of the American College of Trust and Estate Counsel and the Indiana Bar Foundation. He is also a member of the Illinois State Bar Association and he served as the 2014-15 President of the Indiana State Bar Association.
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