The process of estate administration
Estate administration concerns the collection and management of the assets of the decedent. It also involves payment of the decedent’s debts and distribution of assets to beneficiaries. The process of estate administration has been facilitated by the adoption of the Uniform Probate Code (UPC) by about 20 states.
Probate is a legal process that involves proving the validity of the decedent’s will, identifying and inventorying the property of the decedent, an appraisal of the property, payment of the decedent’s debts and taxes, and distribution of the rest of the property in accordance with the directions of the will. If there is no will, then the assets are distributed according to state law. A formal probate proceeding takes place in certain cases, an example of which is when a will is contested. When this occurs, there is more court supervision, and typically one or more court hearings.
The initial action is the appointment of a personal representative, or executor, to manage the estate. This responsibility can be assigned to a person or company, such as a bank. The decedent may have nominated the personal representative in the will, but if the decedent left no will, then the court will normally appoint the surviving spouse or other member of the family to this role.
The first task of the personal representative is to inventory, or make a note of all of the decedent’s assets. Another responsibility is to notify the decedent’s creditors of the decedent’s demise. The personal representative will then pay the decedent’s debts from the estate, provided there are sufficient probate assets.
If there are insufficient assets, the personal representative may be required to secure court approval in order to decide which creditors are to be paid.
Any remaining assets are then distributed under the terms of the will. In the event that the decedent left no will, the decedent is described as having died intestate, and the assets are distributed according to state law. The personal representative is also required to file any tax returns.
If you would like to learn more about estate administration, you should consult an experienced estate planning attorney.