Settling a Probate Estate

Duties and Responsibilities of the Executor or Personal Representative:

When the executor is appointed, or the probate court names the personal representative for the estate, that person becomes an officer of the court and is placed in charge of certain duties and obligations to the probate estate. In most cases an estate attorney may be asked to step in and act as an adviser to the executor or personal representative.

Managing Estate Property and Assets

The executor or personal representative is the person placed in charge of the management, accounting and distribution of the decedent's property and assets, which form the contents of the probate estate.

The decedent's property and assets must first be collected and separated from any owned by the surviving spouse, heirs or beneficiaries. A new bank account must be opened for the probate estate with the account name being the exact name of the Probate Estate.

For example: "The Estate of John Doe"

The bank account must indicate that it is an estate account, not a personal account. Estate funds may not be deposited into a personal account. Securities in the estate must also be held in a name that shows they are estate property and not someone's personal property.

Interest-bearing accounts and other investments

With the exception of the checking account opened for the estate to pay ordinary administration expenses, all accounts opened for the estate must earn interest.

All estate funds must be deposited into an insured account in an accredited financial institution and the executor or personal representative must often inform the estate attorney or probate judge prior to making any new investments.

Additional Restrictions

There are a number of restrictions placed on the authority of the executor or personal representative when dealing with estate property. The executor or personal representative, generally, may not spend any of the estate's money unless for a purpose permitted by law or order of the probate court.

The executor or personal representative is entitled to reimbursement of any probate court costs or fees paid to the county probate clerk, or for the premium on the bond purchased to protect the assets of the estate.

However, the executor or personal representative, generally, may not pay their fees or those of the attorney without a prior order from the court. Failure to obtain the court's permission maybe legal grounds to remove the executor or personal representative and he or she is required to personally reimburse the estate for any fees paid improperly. Additionally, the estate attorney must be made aware of (and should be involved in) any legal issues affecting sales, leases, mortgages, and investments of estate property.

Inventory of Estate Property

The first duty of the executor or personal representative in the administration of an estate is to locate and take possession of all the property and assets owned by the decedent.

The value of the property and assets must then be determined. This step often requires the services of a professional accountant (depending on the size and the number of assets involved in the estate). The inventory and appraisal of all the assets in the estate must then be filed with the probate court.

Change of Ownership

A change of ownership statement must, generally, be filed with the county recorder or assessor at the same time the inventory and appraisal list is filed with the probate court. A change of ownership statement must be filed in each county where the decedent owned real property at the time of his or her death.

Notice to Creditors

A notice of administration must be mailed to all the decedent's known creditors (credit cards, hospital bills, etc.) after the executor or personal representative is appointed as required by state or provincial law. It is, generally, two to four months.

Record Keeping

The executor or personal representative must keep complete and accurate records of each financial transaction affecting the estate including all monies and property received and spent. The accounting records for the estate must show dates when all transactions were made and receipts for all payments or purchases made. The records must also include detailed descriptions of the funds and assets remaining in the estate once all creditors and expenses have been paid.

Filing Financial Records with the Probate Court

All financial records for the estate must be filed with the probate court for review. Failure to present estate finance records to the court maybe grounds for immediate removal of the executor or personal representative.

Further Duties of the Estate Executor or Personal Representative:

Estate Executors and Personal Representatives play a principal role in the probate estate process. As an officer of the court the Executor or Personal Representative oversees the decedent's estate, pays off debt and distribute assets to the beneficiaries. The following list was compiled to be viewed as an informal guide to the probate process and should not be uses for legal purposes. Contact an estate attorney in your area to receive a complete list of Executor and Personal Representative responsibilities. An Estate Finance staff attorney can refer you to an experienced lawyer in your area.

Ensure that all the real and personal property is protected, including arranging if necessary fire insurance on buildings and changing locks to protect assets.

Locate safety deposit boxes and attempt to locate the key.

Selecting the lawyer to act for the estate and obtaining from them notarial copies of the death certificate. Choose a lawyer who has extensive experience in Wills and Estates work. Pick an accountant to assist you if your lawyer suggests this is appropriate. Discuss the lawyers and accountants fees and disbursements right up front.

Locate all life insurance policies and notify the insurance company of the death and forward a copy of the death certificate to have the policy paid to the beneficiary.

Notify all insurance companies including house insurance and car insurance of the death. Ensure that insurance is maintained make a list of all the assets and including stocks, bonds, pension funds, bank accounts, government investments, superannuation payments, holiday pay from work, work related life insurance or benefits for the spouse etc.

Are there any interests in partnerships or companies and locate shareholders and partnership agreements and provide a copy to the lawyer for his examination (there may be triggering clauses in those agreements that must be met quickly).

In conjunction with discussions with the spouse:
Locate the previous several year's income tax returns and provide copies to the lawyer or tax accountant. These must be reviewed quickly to ensure that no filing dates are missed. Government tax authorities do not care that the person is deceased. The executor may be personally liable for any tax penalties that are incurred because filing dates are missed.

Pay the account of the funeral director. Your lawyer will tell you the priority of paying debts, but normally the funeral directors account is to be paid before most other debts.

Make a list of all debts. This will include accounts for charge cards, house utilities, property tax arrears, income tax arrears, loan payments, outstanding leases, mortgages on house or vehicles, alimony or prior separation agreement. Provide this list and supporting documentation to the lawyer.

Once all the assets have been located and the debts paid (including the account of the executor) then the estate will be disbursed in accordance with law and the terms of the Will. In many cases a sale of real estate and personal property is necessary prior to distribution of the estate. This is where an Estate Settler representative will be invaluable. And since reasonable fees are allowed at no cost to you, the Estate will cover all the costs of Estate Settler.

You will need to advertise for creditors in the local newspaper to ensure that all the debts are known and paid.

Your lawyer will advise whether any court proceeding is required regarding the Will. This is called filing for Probate. Often if there is adequate tax advice at an earlier date, the requirement for Probate can be avoided. This will save the estate considerable money.

You will need to notify the beneficiaries about their bequest and provided there is money left after the payment of all debts, the beneficiaries will receive their money or assets from you as Executor of the estate.

You may need to open up a Bank Account in the name of the Estate at your local bank using a notarial copy of the Will (or Probate if required) together with a copy of the death certificate. Use a checking account that you receive the checks back so you can verify that you paid the funds if required at a later date.

Remember: All property and assets are said to be individually owned by the "estate" of the deceased person and must remain so until the judge or other court-appointed person says it may be distributed. However, it is often necessary to sell the property in order to satisfy the debts of the estate before closing the probate.


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