1. Death of a Loved One
Following the death of a loved one, such as a parent, the first and foremost priority is “family.” Nothing should precede that. The business of the estate comes after devoting full attention to remembering your dearly departed, being with friends and family, and allowing friends and family to pay their final respects. Everything else is on hold. The liabilities of the estate will wait for now. If there is a mortgage on the house, it can go late for now. Fortunately, credit scores for the decedent, are now meaningless. Just collect and organize the mail, but focus for now on family. In fact, the business of administering the estate can remain on hold until you receive the certificate of death from the funeral service or office of vital records. Your receipt of the death certificate will prompt you to begin administering the estate.
2. Papers and Effects
Following the funeral, if you haven’t already done so, you need to search the personal papers and effects of the decedent for a will. If the decedent left a will, it will ordinarily be kept in a safe place within the decedent’s home or office, or with an estate planning attorney if the decedent had one. Often times, it will be stored in a safe deposit box at the decedent’s primary bank branch. A person who dies leaving a valid will is legally known as “testate,” while a person who does not create a valid will is known as “intestate.” The will designates an executor in charge of administering the decedent’s estate. For an intestate decedent, the spouse or closest next of kin will have priority of appointment as the administrator of the estate. Keep in mind that access to accounts and transactions of property will be limited to information only until such time as an executor or administrator is appointed by the probate court, following a petition for probate. During this early stage, it is a good idea to have the decedent’s mail forwarded by the US Postal Service for collection and organization by the executor. Monthly statements received will help identify financial assets and liabilities of the estate. Cash and personal property of the decedent should be safeguarded for now. Begin keeping a journal and inventorying valuables.
3. Title to Real Property
If the decedent owned real property, such as a residential home, in his or her own name, then the property cannot be sold until the executor has been duly appointed by the probate court following a petition for probate. If you are not sure how title was held, my office will be glad to help you obtain a copy of the deed free of charge. While the property cannot yet be sold, the executor can and should begin the process of retaining a probate realty specialist in or near the county in which the decedent lived or owned property.
4. Death Certificate
Receipt of the death certificate will prompt you to begin the business of administering the estate. This is a formal process and the advice of a probate attorney is recommended. Each estate is unique and there are a host of moving parts that will need to be addressed. Call to schedule a free consultation. Please be prepared to arrive with the will, if any, the death certificate, important financial statements, and a copy of the deed to the decedent’s real property. Bring the above mentioned journal and inventory of valuable personal property as well. I do not charge for the initial consultation.
5. Petition for Probate
The petition for probate is normally filed in the probate court within the county in which the decedent resided. Thus begins the probate process, and in most counties, a hearing is scheduled approximately 30 to 45 days from the filing date. The purpose of the hearing is to assure that notice has been given to all persons having an interest in the estate, including known and unknown creditors of the estate, in addition to admitting the will, if any, for probate, and appointing the executor of the will (or administrator of the intestate estate). This hearing is normally presided over by a probate judge. Any defect in the petition or notice requirements will result in delay or denial of the petition , so it is recommended that you retain the assistance of a probate attorney. Upon successfully petitioning for probate, the executor is issued letters testamentary, evidencing the court’s formal authority to transact estate property and administer the estate.
6. Estate Sale
Sale of items of personal property belonging to the decedent, such as jewelry, artwork, furniture, and the like, can be accomplished without formality. Next of kin should be consulted on whether they wish to keep certain items that should stay in the family, such as wedding rings, collectibles, or family heirlooms. The decedent’s will may bequeath certain items to particular individuals. The executor should keep track of who gets what as well as the value of each item distributed. Following which, often times, the family conducts an “estate sale” at the decedent’s residence. While this does not require court supervision, the person designated to serve as executor should be in charge of accounting for any money received. Personal property that goes unsold or uncollected can then be sold in bulk to a liquidator and/or donated to a charitable organization such as the Salvation Army.
7. Sale of Real Estate
With the guidance of legal counsel along with qualified real estate agent, real estate belonging to the deceased can be sold shortly after issuance of letters testamentary. Much of the time, the decedent’s residential property is the primary asset of the estate. The executor has the fiduciary duty to sell the property for its fair market value. Probate sales entail a number of procedures and formalities with which ordinary real estate agents are generally unfamiliar, so specialists are recommended. Once the property is sold, the proceeds of sale will need to be deposited into a separate estate account managed by the executor, along with any other cash holdings. All assets, income, and expenditures will need to be accounted for at the conclusion of probate.
8. Creditors of the Estate
Following the issuance of letters testamentary, unsecured creditors of the estate must submit a formal creditor’s claim into the probate proceeding within a specific statutory time period. In California, the period for filling creditor’s claims expires 120 days after issuance of letters testamentary. Legal counsel should be consulted on whether to pay creditors. Any creditors that fail to properly submit a timely claim are forever barred from any further legal action to collect against the estate. However, all taxes should be reported and paid in full. Once this period for creditor’s claims expires, if all valid claims and liabilities have been paid, and the estate is solvent, then the estate is in a condition to be accounted for and distributed to the heirs and beneficiaries of the decedent.
9. Cash Needs of the Estate
For most estates, in order to reimburse family members for costs expended, as well as to pay secured creditors and timely filed claims of unsecured creditors, inclusive of costs of probate such as attorneys fees and compensation payable to the executor, it is necessary to liquidate assets to meet the cash needs of the estate. Further, if there are multiple heirs, it is generally preferable for them to receive their proportionate share of cash rather than fractional shares of property. The estate will not be in a condition to be closed and distributed until it is fully solvent and free of liabilities.
10. Being the Executor
It is important to keep in mind that being the executor of the estate is a fiduciary obligation that requires diligence, responsibility, and accountability. Poor accounting and unnecessary delays frequently result in disputes and family strife. A well-meaning executor can be held personally liable for errors or omissions in administering an estate, not to mention fractured family relationships and a sense of fault with respect to honoring the wishes of the departed loved one. Therefore, a responsible executor will seek the advice and assistance of qualified professionals.