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Probate and Probate Accounting Basics

Probate is how the court supervises the transfer of legal title of property from the estate of a deceased person (the "decedent") to his or her heirs and beneficiaries. If the person who died did not have property to transfer, probate is usually not necessary. When there is property to transfer, probate provides for the distribution of the estate's property to the decedent's heirs.

If the decedent had a will, the person named as executor of the will is also usually appointed as the personal representative, who is responsible for managing the estate, following probate rules and procedures and providing heirs and beneficiaries with a probate accounting. The executor has no authority to act as personal representative until he or she has been appointed by the court and formal "letters testamentary" issued.

If the decedent did not have a will or if the will does not name an executor or the person named as executor in the will is unable to be executor or does not want to be executor, the probate court appoints someone called an administrator to handle the process. The Court usually chooses the closest living relative or a person who will inherit some portion of the decedent's assets.

The Personal Representative must:
  • Decide if there are any probate assets;
  • Locate the decedent's assets and manage them during the probate process. This could take up to a year or longer and may involve deciding whether to sell real estate or securities owned by the decedent;
  • Receive payments due to the estate, including interest, dividends, and other income (e.g., unpaid salary, vacation pay, and other company benefits)
  • Set up an estate checking account to hold money that is owed to the decedent -- for example, paychecks or stock dividends;
  • Figure out who is going to get what and how much under the will. If there is no will, the administrator will have to look at state law (Probate Code sections 6400 - 6414 , called "intestate succession" statutes) to find out who the decedent's heirs are and determine each heir's share of the estate;
  • Value or appraise the estate's assets;
  • Give official legal notice to creditors and potential creditors of the probate proceeding and the deadlines for creditors to file claims, according to state law;
  • Investigate the validity of all claims against the estate;
  • Pay funeral bills, outstanding debts, and valid claims;
  • Use estate funds to pay continuing expenses -- for example, mortgage payments, utility bills and homeowner's insurance premiums;
  • Handle day-to-day details, such as disconnecting utilities, ending leases and credit cards, and notifying banks and government agencies -- such as social security, the post office;
  • File tax returns and pay income and estate taxes - including a final state and federal income tax return covering the period from the beginning of the tax year to the date of death;
  • After getting the court's permission, distribute the decedent's property to the people or organizations named in the will, or to the decedent's heirs if there is no will;
  • File receipts for distribution and wrap up any closing details for the estate;
  • Conduct a probate accounting.
The personal representative must keep heirs informed of what is going on with the probate by sending notices of certain petitions filed, including the petition for appointment of the personal representative and the final petition when it is time for the estate to be closed and distributed. The personal representative is also tasked with submitting a probate accounting to the beneficiaries.

The personal representative must identify, take possession of, and manage the probate assets until all debts have been paid and tax returns filed and provide a probate accounting including any probate joint accounts. This process usually takes about a year. Beneficiaries have the right to object to the probate accounting if they disagree with any transaction. The probate accounting also establishes a time limit for beneficiaries to object to matters of probate administration. After paying the debts and taxes, the personal representative must file a report with the court, which accounts for all income received and payments made on behalf of the estate.

Contact Cheadle Law today to discuss a Probate Accounting for your estate and the benefits the experience of Cheadle Law provides at 949.553.1066

A review of any materials on this web page, any preliminary comments or an introductory meeting does not constitute legal, income tax or accounting advice upon which reliance can be placed. The attorney client relationship can only be created by a written retainer agreement following a check of potential and actual conflicts of interest with other clients.

This article should not be construed and cannot be used as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be used or relied upon without prior express written consent.
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