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Estate Administration

Estate Administration

In 2012 Massachusetts legislature revamped the laws and procedures for Probate Administration of Wills and Estates. Probate means passing the assets from a deceased person to his or her heirs and/or beneficiaries by way of a Will or intestacy. Intestacy means a person dying without a Will.

The 2012 law has met its goal of making the probate process easier. This is a refreshing development given that 99% of other areas of the law get more complex with each passing year.

While the process is simpler it is not simple, therefore, it is still usually preferable to avoid probate. That’s why I suggest (where appropriate) joint bank accounts, transfer on death provisions for brokerage accounts, placing assets into a trust, deeding the house to the kids while reserving a life estate, naming contingent beneficiaries on 401k’s and IRAs. These actions keep you and your family away from the Probate Court on King St in Northampton. But, mind you, some of those actions can backfire. Such as a child on the deed not cooperating when an elder needs to get a Reverse Mortgage on a house (the child not wanting to minimize his inheritance by mortgaging it).

Generally, a family ends up in Probate court on administrations of estates because there is an asset held solely by the decedent without a survivorship or beneficiary provision. For instance, stock inherited from a relative which was sentimentally held by the now deceased 82 year old who never added his wife’s name to the asset. At his death his surviving widow has to probate his estate. Another example is where an elder names “his estate” on his life insurance rather than specific beneficiaries.

The new Probate process, for those who regrettably do have to go to court, is still far less aggravating than the old days provided there is no conflict amongst the survivors. There is now a process known as an Informal Probate. (This is different from a Voluntary Administration process which has existed for many years, and applies to situations where there is only $25,000 or less). With the new Informal Probate law a family can probate an estate on an informal basis even if there is a million dollars in Yankee Candle stock held solely in the decedent’s name.

For example, an 86 year old woman dies with a bank account of $72,000 just in her name. Under the old probate procedure it would take months to get a formal Executor appointed. Now it can take as little as two to three weeks to get a Personal Representative appointed depending upon the caseload at the Court. (The title of “Executor” no longer exists in Massachusetts).

Although a Personal Representative can get appointed more easily under this new law there will still be the onerous work of administering and “settling the estate”. Here are some examples of the tasks involved:

Determining what assets the decedent owned at death and which need to pass through probate. For example, old stock for which the company has merged or disbanded. Liquidating stocks through third party intermediaries, which is invariably a hassle. Preparing real estate for sale by emptying the contents, listing it with an agent and selling it. Filing a final income tax return. Processing claims on life insurance . Dealing with outstanding bills, many of which are often health related. Locating beneficiaries. Appraising assets such as jewelry. Dealing with the Registry of Motor Vehicles, banks and other financial institutions including pension companies.

Once the Personal Representative has consolidated all the assets and paid all the bills he or she will prepare a First and Final Account. When all the beneficiaries have assented to the account, then the PR can distribute the inheritances and be done with it.

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