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Financial Newsletter
Probate: Things You Should Know!
Probate, in its most restrictive sense is the process
of "proving" that a decedent's will is valid and that it is the last
will that person wrote. Viewed in a broader scope, "probate" refers
to the entire process of the court-supervised administration of an
estate, from the initial probate of the will to the distribution of
estate assets, and the official discharge of your personal representative,
i.e., the executor you named in your will, or the court-appointed
administrator if you didn't have a valid will, or if you didn't name
an executor in your will or if the person you named dies first.
Here are a few of the many things you should know:
Q. How long is the process of Probate?
A. Where the estate is relatively small and uncomplicated,
the probate of a will at the local courthouse may take 15 or 20 minutes
(and may not even require a lawyer). If the estate is large and/or
there are complicating issues, the probate of a will can require a
lawyer, advance notice to heirs, court hearing(s), and perhaps months
(and in extreme cases years) to complete the process.
Q. In a nutshell, what is the role of an estate's
personal representative?
A. When a person dies, property owned in the decedent's
name must be assembled. Next, debts, taxes, and expenses of the decedent
must be paid. Whatever is left must then be distributed to the individuals
or charities entitled to that property according to the decedent's
will. If there is no valid will, or to the extent his or her will
is partially invalid, the distribution of any remaining property is
determined by state intestacy (without a will, descent and distribution)
laws. The estate's executor or administrator is legally responsible
- and legally authorized - to collect the decedent's assets, pay appropriate
death taxes, debts, and expenses, and distribute any assets remaining.
Q. What is the difference between an estate's Executor(trix)
and Administrator?
A. An "executor" is the person appointed in a testator's
will to guide his/her estate through probate. If the decedent left
no valid will, if parts of the will are invalid for some reason, or
if the named executor is unable or unwilling to serve, then either
the surviving spouse or another relative of the decedent, or one or
more of the persons entitled to his or her estate, may be appointed
as the estate's administrator. In some states, if no one of the higher
priority is able or willing to serve, a court might appoint a creditor
or any other "person" as administrator. The overall descriptive term
for a person or party (such as a bank) serving the estate in the capacity
of executor(trix) or administrator is "personal representative." A
female appointee is sometimes referred to as "executrix" or "administratrix").
Q. Is the executor or administrator responsible
for the details of a person's funeral?
A. No. The funeral almost always occurs before the
executor or administrator has been formally appointed. Usually, funeral
details and decisions are made by the decedent's immediate family.
The personal representative's only legal duty with respect to the
funeral is typically to pay and keep records of reasonable funeral
related expenses. Sometimes, however, the decedent's will provide
instructions about the funeral and/or burial and the personal representative
should honor these directions to the extent practical and possible.
Q. What is the legal significance of the term "domicile?"
A. One of the first decisions that must be made when
a person dies is, "Where was that person's domicile?" The answer is
of great importance since state laws, and taxes, can vary widely.
Generally, a person's domicile is the state and county where his permanent
and principal home is. Some courts have defined domicile as "the place
to which a person always intends to return." Domicile is often confused
with residence. The distinction is this: A person's residence is where
he happens to have lived at the time of his death. Domicile implies
not only a person's presence, but more importantly, the person's intention
to make a given location his permanent home.
Q. What is Meant by "Letters" or "Letters Testamentary?"
A. When a person dies, his will is recorded in the
office of the local register of wills of the county in which he/she
was domiciled. The register of wills (or the appropriate court of
jurisdiction) will issue to the named personal representative either
"letters testamentary" (in the case of an executor) or "letters of
administration" (if an administrator is serving). These "letters"
are proof of the legal authority of the personal representative to
collect and deal with the assets of the decedent's estate.
AS ALWAYS, PLEASE FEEL FREE TO CALL OR E-MAIL TO DISCUSS
THESE OR OTHER FINANCIAL ISSUES OF CONCERN!
LPL Financial representatives offer access to Trust
Services through The Private Trust Company N.A., an affiliate of LPL
Financial.
