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Law Office of Walter E. Bak
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Probate
When a person dies, all property that does not pass directly to others (such as jointly owned property and life insurance payable to a named beneficiary) is subjected to a legal proceeding called probate under state law. This proceeding takes place under the jurisdiction and supervision of the probate court where the deceased person, who is called the decedent, lived.
The probate procedure involves three major functions. First, the court will determine if the decedent left a valid will. Second, the court will appoint a personal representative, an individual or bank, to administer the decedent's estate. Third, the court will supervise the administration of the property subject to probate, which is called the probate estate.
The purposes of a probate proceeding are to:
- Collect the decedent's probate assets
- Protect and preserve the property of the estate
- Pay all debts and taxes
- Determine who is entitled to the probate estate and
- Distribute the property to them
This probate procedure is designed to assure that all property of the deceased is accounted for, that all taxes are paid, the person properly entitled to the property receives it, and the personal representative receives the protection afforded by statute and by the court's approval of his actions.
There may be special circumstances where everyone interested in an estate, by common consent after review with their attorney, concludes that formal probate proceedings are unnecessary. However, anyone who undertakes to deal with the property of the decedent without qualifying as an executor of administrator in this manner exposes himself to personal liability for his conduct and should be fully advised by a lawyer before acting in this manner even in a case where it may be appropriate.
The person seeking appointment as a personal Representative should retain a lawyer for advice on legal matters in connection with the appointment and the conduct of the probate proceedings, as there are many rules of law which govern both procedural and substantive aspects of probate. Once the appointment has been made the personal representative, under the guidance and direction of his attorney, generally will do the following:
- Take possession of and preserve the general property of the decedent
- Collect all income such as rents, interest or dividends, and make demand and collect all notes due the decedent
- Assist in determining the name, age, and residencies and degrees of relationships of all heirs of law and next of kin
- Complete any pending lawsuits in which the decedent had an interest
- Carry out all orders and judgments of the probate court
- Determine and pay all federal and state estate taxes pay the valid claims of creditors of the decedent and, when necessary, sell the property to raise funds to pay such claims
- Distribute the remaining assets to the proper people
Probate proceedings in Massachusetts are not complicated, but they require some experience, and to achieve the desired results they must be handled with an understanding of the underlying legal principles. These proceedings require the preparation and filing of many legal documents, the publication of notice, the holding of one or more hearings in the Probate and Family Court, appraisals of property, and finally, the transfer of all assets and the completion of the probate proceedings by the preparation and allowance by the court of the accounts of the personal representative.
What is the Role of the Personal Representative?
If a decedent leaves a will, it will ordinarily name a personal representative who is usually referred to as the executor. If the decedent leaves no will, the personal representative would be referred to as the administrator. The laws of Massachusetts set forth priorities with respect to whom should be appointed administrator. The personal representative, whether an executor or administrator, is personally responsible for the proper handling and settlement of the decedent's estate including timely payment of all taxes due by reason of the decedent's death.
What is the Role of The Court?
All probate proceedings are subject to the jurisdiction of the Probate and Family Court. However, the day-to-day work of the personal representative, such as paying bills, settling uncontested claims, liquidating estate assets where appropriate, preparing tax returns and paying taxes is carried out with little intervention by the court. When disputes arise, or uncertainty exists as to the proper meaning of a document or the identity of a person entitled to share in the estate, the court will hear testimony at a hearing and enter appropriate judgments and orders.
The initial steps of petitioning for the allowance of a will (or the administration of the estate) and appointment of a personal representative usually takes six to eight weeks form the date of the filing of the petition. The petition may be prepared and filed immediately following the death of the decedent. State and federal estate tax returns and payment of taxes are due nine months from the date of the decedent's death. Although a partial distribution may be made prior to the distribution of the estate, final settlement, because of tax complexities, may take up to two and half years. However, the vast majority of the work is completed in the first nine months following the death.
Every estate is subject to both state and federal estate taxes, which are based on the right of the decedent to transfer property at death. Both the Massachusetts estate tax and the federal estate tax are graduated taxes that are levied on the net estate after allowing for certain deductions and exemptions. The obligation to prepare and file both federal and state estate tax returns can exist even if the decednt left no probate estate. This is due to the fact that jointly owned property, life insurance and certain types of transfers by the decedent prior to their death, while not subject to probate, are subject to taxation by the government. A personal representative should not attempt to draft the necessary returns, compute the taxes due to meet necessary filing requirements without the supervision and guidance of a lawyer.
What are the Fees and Costs Involved?
The fee of the personal representative is not fixed status or court rule, but it must be reasonable with regard to the fair value of the services actually rendered by the personal representative in relation to the size of the estate. The same general guideline exists for the lawyer in setting his fees for services rendered to the personal representative. Both fees are subject to the approval of the Probate and Family Court.
According to Massachusetts laws, when the decedent leaves an estate, with or without a will, consisting entirely of personal property of a total value less than $15,000.00, together with a motor vehicle, a simplified proceeding may be used instead of a formal probate proceeding. If the decedent left a will, it is filed and the simplified proceeding still may be followed. Usually a decision as to the availability of the informal proceeding can be made by the lawyer and the personal representative at the time of the initial conference.
It should be borne in mind, however, that even if the informal proceeding can be utilized, there may be filing requirements with respect to the Massachusetts estate tax return and possibly the federal estate tax return.
What Happens in the Case of Jointly Owned Property?
Joint tenancy is a form of a co-ownership of the property where two or more persons own the property together. On the death of one joint owner, the ownership of the property passes automatically to the surviving joint owner. Joint ownership should be used cautiously since the mere transfer into joint names may cause gift tax liability at the time of transfer and there may be undo and unnecessary estate tax complications at the death of any one of the joint owners.
What is the Importance of Having a Will?
Experience has proved the wisdom of those who have made a carefully considered will. By doing so, they have insured that their property will go to whom they wish and that those who will be faced with the settlement of the estate can do the job as efficiently as possible. If you do not make out a will, your probate property will be distributed according to the laws of interstate succession, which is an inflexible formula governing the distribution of one's property. Anyone in possession of a will of a deceased person must file that will in the appropriate Probate and Family Court within 30 days of the death of the deceased person. Statutory penalties are provided for withholding or destroying a will.
