What is Probate?

Some tips, traps, and when you should consider hiring a probate lawyer.

Three things you need to know about Probate:

  1.        Probate rules may overrule your personal wishes
  2.        Probate can add significant expense
  3.        You may be personally liable for the debts of the deceased 

 Definition of Probate

Probate is not just the official recognition of a will, and appointment of the Personal Representative under the will of a deceased person. Probate is also a set of rules designed to govern the transfer of assets. Protecting assets while you are alive is not what probate is meant to do.

But what might surprise you is what the probate rules say. For instance, whether your wishes govern, or the law overrules them. The fact is, there are many laws on the books that are the opposite of what you think they may be. Before making an estate plan, it is very important to know how the law could change your will, or the division of your property in ways that you did not expect. When probating a will, it is also important to know when you should hire a probate lawyer.

Where Is the Probate Law Found?

Probate in Maine is governed by the Probate Code. The code is found here. But even though it is available online, the Maine Uniform Probate Code is not easy to read or understand. If you have a friend or loved one who named you as the Personal Representative in their will, you need to determine if you should hire a lawyer to probate the will. This article contains practical guidance on the steps to probate a will. It also gives you as a named executor, or Personal Representative, a quick guide to determine if you should hire a probate lawyer.

The Maine Probate Code contains the law that governs our property and our persons under two circumstances. The probate code says what happens to our property 1. If we lose our marbles, and 2. When we die.

Why is it important to know about the probate process? Because not knowing could cost you a lot of money. Not knowing could also cost your family in emotional trauma. If you are named as the executor or Personal Representative, probating the will could open you up to personal liability for the debts of the estate.

What Does Probate Govern? 

Probate law governs how our assets and our bodies are to be managed and disposed of during a period of disability, and after we die. The Maine Probate Code contains the default provisions. That means that in certain circumstances you can make your own rules about what is to be done with you and your property if you are mentally incapacitated or die. But what many people do not realize, is that when your wishes conflict with the probate code, your wishes may not win out. In some situations, if your wishes conflict with the Maine Probate Code, the Probate Code will win.

The default rules can be changed by the person who made the will. You can make up your own rules. But there are two pitfalls to this. One is, you must make up your own rules before you need to rely upon them. In other words, if you have become mentally disabled, you cannot make any instructions. It’s too late! And two, you need to understand how the probate law will change your wishes if you do not carefully plan against it. If you are a Personal Representative, or “executor” it is important to understand all of the tasks and obligations you must undertake in order to avoid personal liability.

Importance of Probate Rules in Making a Will

When is it that you cannot speak for yourself? You cannot speak for yourself when you are under a disability. You are under a disability when you are a minor, or if you are determined to be mentally incapable of understanding what you own, who your personal relationships are, and the nature of dangers to yourself or others.

So, naturally, if you are an adult and not under a disability, you can make rules about what to do with your assets and your person. Your rules and instructions should govern instead of most of the Probate Code’s default rules if you become disabled, and after you die.

But what you may not know, and what many people do not understand about the Probate Code, is that there are some default rules that are very difficult to change. Here are some examples of where probate may interfere with your wishes. These probate laws may surprise you. 

Also, for a Personal Representative or executor, it is very important to know the rules. Why? Because you may make a mistake because you thought you knew what to do, when really you had no idea. Why? Because the plain language of a will may be contradicted by the Probate laws, or how those laws have been interpreted by the Courts. That is one very good reason to hire a lawyer. Every Personal Representative is entitled to good legal advice. But not every Personal Representative gets advice.

Can You Disinherit a Child in Maine?

Some of the rules that are difficult to change have to do with assets you leave to your family after you die. Can you disinherit a child in Maine? Yes, you can. But it is tricky. The Maine Probate Code requires that you make it very clear in your will that you mean to disinherit a child. What does this look like in real life? I was probating a will for a client. The will said that a certain daughter was not included in the estate. That is what we call a “disinherited heir”. That sounds very easy. You simply say in your will that this child does not get anything. Right? Not so fast.

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Probate Resources

  1.        Steps of Probate 
  2.        Filing Online 
  3.        Online Forms
  4.        Probate Lawyer

 Probate Required Notices

Under the Probate Code, when you are probating a will, you are required to send a notice to that disinherited heir. We sent the notice, as required by law, along with a copy of the will. And the disinherited child’s lawyer showed up in Court, and demanded money from the estate even though the will said she gets nothing. How could the lawyer do that? The lawyer claimed that it was not clear in the will that the man who made the will disinherited this child. This claim is going to cost my client time, and money to disprove. This claim, even though baseless, caused months of delay. This is months of time during which real estate taxes pile up, and my client cannot sell the estate’s real property. This is months of time during which my client cannot pay the final tax return or sell estate property.

When Does Disinherit Mean Disinherit?

So you can judge for yourself, I’m going to state here what the will said: “I now have in mind my daughter Jane Doe, but leave my estate as hereinafter follows.”
And what follows is that he left Jane nothing. Now let me ask you: does that sound ambiguous? Is it not clear that this man by saying he knew he had a daughter named Jane, “but” that he left her nothing in the will? Is it not clear she was not entitled to anything? You would think so.

Here is what the disinherited child’s attorney said in his letter: “Since the will does not contain any provision to the contrary, Jane Doe claims her share in the exempt property pursuant to 18-C M.R.S. § 2-403”.

The lawyer is saying that the man who stated in the will he knew his daughter existed, and yet chose to leave her nothing, despite that, he still wanted her to get something. Does that make any sense. No. But nevertheless the lawyer is making that claim. Why? Because the Maine Probate Code says this “children of the decedent are entitled jointly to the ($15,000); however, the decedent, by will, may exclude one or more adult children from the receipt of exempt property.”

So, I guess what the lawyer is saying is that because the man who made the will (not a lawyer) did not specifically refer to the Maine Probate Code, and say, “Jane Doe, my daughter, is not entitled to any part of the $15,000 exempt property, referred to in 18-C M.R.S. § 2-403” therefore, Jane Doe is entitled to money. How hard is it in Maine to disinherit a child? Or is this simply a shake down? Because Jane Doe’s lawyer knows that even though it is very clear Jane’s father disinherited her, if he makes this argument it may cost more money to fight it than to simply pay her!

What is Exempt Property Under Probate?

If you notice in that last section, there is something called the “exempt property”. Now ask yourself, did you know there was such a thing in the Probate law called exempt property? What is it? Who gets it? What is it exempt from? This reinforces my point that the probate law is not simple, or intuitive.

Can You Disinherit a Spouse in Maine?

The Maine Uniform Probate Code has a provision called the “Elective Share”. The elective share is something the law created to prevent a married person from disinheriting a spouse. But what if you do not want to leave your spouse anything in your will? You can disinherit your spouse in Maine, but it is very difficult. There are many conditions that you must satisfy if you want to disinherit your spouse.

What is the Elective Share?

There is a very complicated answer to this simple question. If you die, and you do not leave any property to your wife, or husband, what can they do about it? They can “elect” to get a share of your estate instead of what you left them. What do they get in Maine if they elect to? I am going to quote the Maine right of election statute so that you can read it yourself: “The surviving spouse of a decedent who dies domiciled in this State has a right of election, under the limitations and conditions stated in this Part, to take an elective-share amount equal to 50% of the value of the marital-property portion of the augmented estate.”

“Augmented Estate” “Marital-Property Portion?” What does that mean? Once again, the law is not intuitive or clear or easy to understand.

For instance, what is the “augmented estate”? What are the “limitations and conditions”?

You can read the full text of the elective share amount here. But unless you are very good at what one of my clients called “word puzzles” I would not bother. Because you will have a great deal of difficulty understanding it even if you do read it. The elective share statute attempts to create a kind of divorce-like division of a dead person’s estate, only without the benefit of a divorce lawsuit. So, if you are married, and you die, if your spouse does not like your will, they can instead claim a share that is calculated based on the value of the estate. But not just what you died owning, but also the “augmented estate” which includes any gifts or transfers the dead spouse made, and also insurance benefits paid out to others, etc. You see, they want to make sure that you did not surreptitiously transfer everything away before you died in order to avoid the right of election. Don’t get me wrong, this is well intentioned. But sometimes there are very good reasons to avoid the right of election. For instance in second marriages, or with ancestral real property, or perhaps the couple simply had an understanding.

Once the augmented estate is added up, then, a sliding scale is applied based on how long the couple was married. After fifteen years of marriage, the surviving wife, or surviving husband is entitled to the full 50% of the augmented estate.

 

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207-236-4888 

Can You Waive the Right of Election?

So, to recap, the Maine Probate Code prevents you from disinheriting your spouse. How can you disinherit your spouse? You can read here the law of waiver of right of election. The spouse must sign a waiver of the right of election. But a waiver is not a simple proposition. There are several requirements that must be met. Also, even if your waiver meets all the requirements, the Court can still decide that the waiver was “unconscionable”. That means that if your waiver is in writing, and signed voluntarily, and the spouse who signed it had full disclosure of all of your property, and had their own attorney represent them, and voluntarily waived the right to know about any property not disclosed, and the waiver said that the spouse waived all rights, the Court can still say, “no, we don’t like this we think it is unfair” and give the surviving spouse a right to fifty percent of everything.

What does this mean for you as a named executor, or Personal Representative? It means that you may be either forfeiting rights you didn’t know you had, or perhaps running afoul of obligations you thought you met.

 

Personal Representative

  1.        Responsible to File Tax Returns 
  2.        Pay Debts & Obligations
  3.        Serve Notice
  4.        Probate Lawyer

Every Family Situation is Unique

The reason I dwell on these subjects is to inform the reader that there are rules that may change what they thought their will was going to do. There are many reasons why people waive their right of election. Perhaps the couple came into the marriage with their own separate property. Perhaps it is a second or third marriage, and there are children and stepchildren, perhaps the couple sat down and agreed to a certain division. Whatever the reason, you should know that after you die, your spouse may be able to use the Maine Probate Code to change that agreement, if you do not carefully change that now. Which brings me to another probate law that may surprise you.

Do Stepchildren Have Rights to My Estate in Maine?

The answer is, yes. Maine passed a new probate law a short while ago. That law gave stepchildren rights to the estate of their step-grandparents. Yes, you heard that right. Of course, in many cases stepchildren are considered no different from blood relations by their stepfamily. But in many families stepchildren are not considered to be part of the family. Perhaps they were fully grown and on their own long before their stepparent came into the picture. Perhaps the stepparent stopped living with the other parent, but they simply did not get a divorce yet. Whatever the case may be, I think it is fair to say that if you polled the country, the vast majority of people would say that the did not think that a step grandchild would have any rights under the law to their estate when they died.

Again, if you are a Personal Representative, are you required to give notice to step-children?

In the 2019 version of the Maine Probate Code stepchildren are now included in Maine’s anti lapse statute. Once again, in order to understand what probate is in Maine, you must learn another legal concept. What is the anti-lapse statute? An anti lapse statute is part of the Maine probate code. It is one of those default rules I was telling you about. The anti lapse statute is meant to prevent a gift in your will from “lapsing” if the person named to get that gift died before you did. Let that soak in. You make a gift and take the time to name the person getting that gift. You had not looked at your will in years. That person dies before you. Then you die. The gift says, give it to this person, but this person is dead. Who should get the gift? Does it go back into the “pot” of your assets for someone else? Or do we give the gift to family members of the person pre-deceased you?

What is the Anti Lapse Statute in Probate?

The anti-lapse statute says that if you make a gift in your will to certain people who are family members, if one of those people dies before you, the gift you made will go to their kids or grand-kids, etc. That is an oversimplification, but you get the idea.

Okay, so you may not have been aware of the anti-lapse probate law. Again, you need to know the probate law, because you might not want the result that the default rules provide. For instance, if you say that your brother Bob gets your father’s Rolex, and if Bob dies before you, should his kids get your Rolex? Should his step-kid get the Rolex? Maybe that’s okay, maybe it isn’t. But did you know that under the Maine probate code one of Bob’s kids or step-kids might get dad’s Rolex? Does that surprise you? I am a probate lawyer, and it surprised me.

Can I Withdraw A Joint Bank Account After Joint Account Owner Dies?

While this is technically not a part of the Probate Code this law affects joint bank accounts. The intention of the statute is to protect elderly people. But, once again, it is important to know the rules, and make your own decision. In other words, do not assume what the law is. Making an estate plan with an experienced estate planning lawyer is the best way to ensure that your wishes are carried out.

In the instance of joint bank accounts in Maine, the bank is now required to find out what your intentions were when creating the account. Many people may not realize that a joint account holder could withdraw all of the money if the other joint account holder dies. The joint account holder may simply have set up the account for convenience. Perhaps their joint account holder is meant to do their shopping or pay bills. But it may not be the intention that the joint account holder “inherits” the account if you die.

The law amends 9-B MRS §427, sub-§13 and 18-A MRS §6-105. Banks are now required to give you a form when you open a joint bank account. The form says “Do you intend for the sum remaining upon your death to belong to the surviving party or parties? Yes or No?”  Overall, this is a good idea. But also, in my experience, just as many people expected their joint accounts to belong to the survivor, as did not. The question is, what happens to an account that was opened before the law changed? I suspect that there is no requirement to obtain the statement.

What is the Process of Probating a Will?

So, what is Probate? Probate is not just a set of laws about your property. It also outlines the procedure to prove a will. In other words, in order to legally carry out the provisions of your will, your Personal Representative must comply with some procedural rules in the Probate code.

What if you don’t have a will when you die? If you don’t have a will, the probate code still governs. Only in that instance, the procedure is called “intestate probate”. There are many similarities between probate with a will, and probate without a will. Again, just like the substantive probate rules, probate procedure rules may surprise you.

Since the probate procedure is different for different estates, we can only give you generalities. But the probate procedure, at least on the face of it, is meant to be a self-help affair. That means you can obtain the forms you need, and file them, online. In other words, you do not need a lawyer to probate a will. But many people choose to have a lawyer.

The probate procedure is about proving jurisdiction over necessary parties… and hoping there is no contest!

Why would you use a lawyer to probate a will?

There are many reasons why you would choose to use a lawyer to probate a will. It goes without saying, that if you have very few assets or a very small value estate, you probably do not need a lawyer to probate the will. But before you choose to probate the will without a lawyer consider these questions: when you read the probate terms above, did you find them easy to understand?

Are you willing to take a chance that you will become personally liable for a debt of the decedent?

Are you comfortable with the income tax code?

Are you good at keeping records?

Are there multiple beneficiaries of the estate?

Are there any disinherited heirs?

Did the person who died own rental property?

Run a business?

Did they leave a disabled or incapacitated spouse or other beneficiary or heir at law?

Did the person who died have a large retirement account or IRA?

What about a federal thrift savings plan?

What Are Will Substitutes?

Will substitutes are assets that generally have not in the past been governed by the probate code. But guess what? The Maine probate code has an entire Article devoted to nonprobate transfers on death. This may be termed the “probatization” of non-probate assets.

The section on multiple party accounts describes what happens to multi party accounts when one of the account holders dies. Article 6 does not apply to business accounts, or trust accounts. But many people have attempted to avoid the probate rules by creating joint accounts, or POD designations, or beneficiary designations. But with Article 6, those assets transfers have new rules governing them. Even though I do not favor these methods of asset transfer at death, at least they had the virtue of being straightforward and simple. Unfortunately, now, these asset transfer methods have taken on some of the byzantine complexity, and well-intentioned and some might argue, new sources of potential litigation. Why? Because some of these provisions required determining who contributed what to the account, and then what their intentions were with that joint account money at their death. But the banks or financial institutions are not required to inquire about any of that information. So, if a joint account holder wishes to object, it will lead us to an expensive and time-consuming legal battle.

If the deceased owned property in multiple states, you might have to probate the will in the other states as well.

 

 

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Probate Process

  1.        12 Steps to Probate 
  2.        Administration of Estate
  3.        Avoid Liability
  4.        Probate Lawyer

What is the General Process of Probate?

 

The general process of probate follows a pattern. But sometimes the order of steps can be different. As a probate lawyer, I generally work closely with a certified public accountant when I probate an estate. I may also work with a financial advisor. The general steps are

1. Filing the Will and Death Certificate with the Probate Court.

2. Filling out the correct Probate Petition, filing it, giving the necessary notice to all interested parties and proving jurisdiction over necessary parties to the Probate Court.

3. Receiving your certificate of appointment as Personal Representative.

4. Obtain a tax identification number for the estate and open an estate bank account.

5. Marshall the assets of the estate.

6. File a tax returns.

File a federal estate tax return (for large estates or to establish cost basis, etc).

File a Maine state estate tax return (if necessary depending on the value of the estate).

File a fiduciary or Personal Representatives tax return.

7. Pay the debts of the estate.

8. Determine who gets what as dictated by the will, interpretations of ambiguous language, the anti-lapse statute, or other provisions of the probate code

10. Create an informal account of the estate.

11. Get the approval of all the beneficiaries for the proposed distribution of the estate assets, and if the statute of limitations has run, and everyone signs off, and you’ve filed any necessary final tax return, and paid all the taxes, then distribute the assets – perhaps holding something in reserve for a brief time.

or

12. Hire a probate lawyer first, and let them help with all of this work!

You can obtain probate forms online here. You can also file your probate petition online at this web address. And if you would like to hire a Maine probate lawyer, you can call this number 207-236-4888.

 

Like the list of questions that suggest you should hire a probate lawyer, the general process of probate outlined in this article might suggest to you that you should hire a probate lawyer. Again, if the estate is a very low dollar value, and consists of simple property, and simple relationships, there might be fewer steps. But if you have any of the concerns listed and think that most of the steps apply to your probate proceeding, you should hire a probate lawyer.

What is Probate (and When Is It Necessary)?

Another name for Probate, is Estate Administration. Probate is the judicial process by which a decedent’s assets (his or her estate) are distributed to his or her heirs or other devisees. A devisee is just an old-fashioned word for someone given something in a will. Probate codes and procedures differ from state to state. Maine has adopted a version of the Uniform Probate Code. That means that some of the best attorneys and judges in Maine took a model probate code, and adopted it for use here. That code was adopted in 2019, so as of the writing of this article, many lawyers are still unfamiliar with many of the specific details of the Maine Probate Code. However, there are general steps to follow Probate for administration of an estate where the individual died either with a will, or without a will (and without a will substitute). That means that when the person died, they owned property and they did not specify a way for it to be automatically transferred to someone else at their death. Either they wanted their will to dictate, or they simply had no plan. Having no will, and no will substitute means you have an “intestate probate”. Intestate has similar rules to testate or will-based probate.

To encourage uniformity in probate codes and procedure in 1969, the National Conference of Commissioners on Uniform State Laws, also known as the Uniform Law Commission, with the Real Property, Probate and Trust Law Section of the American Bar Association, created the Uniform Probate Code (UPC). To date, 18 states, now including Maine, have fully adopted the UPC, and all but a few states have adopted the UPC at least in part. Despite this attempt for uniformity, probate is undeniably state specific.

Here is a handy guide to Probate.

Informal verses Formal Probate

The initial decision to make is:

  1. whether decedent had a valid will, and
  2. whether probate is necessary.

If a decedent had a will, he or she is deemed to have died “testate,” and the will governs. Maine has what is called “informal probate”. That is a somewhat expedited version of proving the existence and validity of a will. You need to first determine if you are eligible for “informal probate”

That will determine if you can file an informal or expedited application or must file a formal or hearing-necessary probate application. What are some of the reasons you might need to do a formal probate?

You might need formal probate it there was something not quite right about the formality of the will. Or, if the person named as personal representative died or simply does not wish to act. In short, any time it is not clear you are entitled to have informal probate, you must apply for a formal probate.

If there is no will, you must look at the intestate rules. These rules will tell you who is eligible to serve as the Personal Representative of the estate. Also, the rules will tell you who is entitled to receive the estate property.

The next inquiry is whether the decedent’s assets require probate at all. Maine provides expedited or alternative proceedings or tools for small estates – even as simple as by affidavit. For instance, in Maine a probate estate worth no more than $40,000 can be collected by affidavit. Although the simplified procedure has some requirements, you might consider administering a small estate without hiring a lawyer.

Probate Affidavit Procedure

Affidavits for the collection of property is allowed in Maine. Maine allows an affidavit for collection of both real and personal property by affidavit so long as the value of the estate is not greater than forty thousand dollars. Some states allow a self-executed affidavit; others require the affidavit to be filed with the court. Generally, affidavits require the passing of  time from the date of a decedent’s death-ranging from a few days to a few months. After that, a “successor” to the decedent (a spouse or heir) signs the affidavit and presents the affidavit to collect the decedent’s assets for distribution to his or her rightful heirs.

Even Simpler Probate Procedure

If the estate is really small, and the only value in the estate is the exempt property, the property can be distributed, and the only requirement is to file a closing statement with the Probate Clerk.

Opening the Estate

If a decedent owned assets not otherwise disposed of at death (see non-probate transfers below) and neither a summary proceeding nor a small estate affidavit is an available option, the estate of the decedent must be “opened.” This is done by following the Probate procedure in Maine in the County where the person lived before, they passed away. The process includes filing the proper application and notifying the relevant and necessary parties. If a decedent owned property in more than one state, probate may be required in each state. In Maine you can do this online.

During this initial phase, in both testate and intestate estates, the initial pleadings will include a petition for the nomination of a court-appointed or approved individual, serving in a fiduciary capacity, who is to administer the estate throughout the probate proceeding. This fiduciary is called a Personal Representative although many people use the term “Executor”.

A properly drafted Will should contain the name of the individual the testator wishes to nominate as the Personal Representative and include at least one successor. However, if a decedent died intestate (without a will), or if the nominated Personal Representative or successor cannot serve for any reason, Maine probate code says who is eligible and who has priority to serve as a Personal Representative of a decedent’s estate, including: a spouse, descendants/heirs, creditors or, in exceptional circumstances, the public administrator. In Maine, the Governor appoints a Public Administrator in each county to serve a 4 year term.  Typically, the Public Administrator is appointed Personal Representative for an estate with unclaimed funds. The Petition will also include a request for the determination of heirs, either as evidenced by a valid Will attached to the Petition or by determining heirs using the applicable intestacy statute, or, in some states, both. That means if you are probating a will, you will need to list all the heirs at law, and anyone who was named in the will, including anyone left a bequest or devise, and anyone named as a trustee or personal representative. Estates are opened through either formal or informal proceedings, with the subsequent administration of the estate conducted in either a supervised or unsupervised fashion.

Informally Opening an Estate

Informal Proceedings to open an estate occur when (a) the heirs of a decedent are either established in a valid Will or without question in light of the intestacy statute, (b) there is either a nominated Personal Representative in the decedent’s Will or an eligible Personal Representative with priority of appointment under state law willing to serve, and (c) a Petition is filed within an allowable time frame following the decedent’s death. If the petitioner (1) proves that (a), (b) and (c) are satisfied in the initial Petition; (2) files all other relevant pleadings and documents with the court; and (3) provides copies of pleadings and gives adequate notice to other interested parties as required by law; the court will likely accept the pleadings, open the estate and approve the nominated Personal Representative without a formal hearing.

Formally Opening an Estate

Formal proceedings to open an estate occur for many reasons, including but not limited to:

The inability to informally appoint a personal representative; The decedent’s heirs are not readily identifiable or informal determination of heirs without court intervention is impossible;

There are questions about the validity of a decedent’s Will; Too many years have elapsed since the decedent’s death;

The estate is insolvent, without adequate money to pay creditors; Disagreement between heirs exist or are anticipated.

During the formal opening of an estate, an interested person files the initial Petition. Interested persons include nominated Personal Representatives, persons with priority of appointment as Personal Representative, spouses, children, devisees under a Will, creditors, and other parties as authorized by state law. Copies of the Petition and pleadings must be served on all other interested persons. Once the court accepts the Petition, a hearing must be scheduled, and notice of this hearing must be sent to all {known) interested persons. The length of the hearing will depend on the issues, controversies, and parties involved in the estate. After the court hears from all parties, the court appoints the Personal Representative and issues a ruling on the decedent’s heirs.

Letters Testamentary or Letters of Administration

Accompanying the court order appointing a Personal Representative and declaring the heirs of a decedent are documents showing proof of a Personal Representative’s authority to act on behalf of an estate. When there is a Will, the court issues Letters Testamentary, and when there is no Will, the court issues Letters of Administration. Personal Representatives use these Letters through the administration of the estate to collect assets and transact business on behalf of the estate. The Letters typically expire after a few years, though courts will “renew” them if the Personal Representative needs additional time to administer the estate.

Administering the Estate

Is the Personal Representative entitled to a fee for probating a will? The Personal Representative is entitled to a fee for administering the estate. The Maine probate code states that the Personal Representative is entitled to “reasonable compensation”. In some states the code actually has a fee schedule and states the exact fee. The good thing about reasonable is that it can be argued about what is reasonable. The bad thing about reasonable is that it can be argued about what is reasonable. So, if you are serving as a Personal Representative, you should purchase a notebook and ledger pad, and note all the time, and services you provide together with the date of service. Also, you should keep track of any necessary outlay of money that you have to make on behalf of the estate. You should do this so you can recover your “reasonable” fee and also any money you pay.

Once an estate is opened and a Personal Representative is appointed, he or she must “administer” the estate. The duties of a Personal Representative are relatively standard although, as mentioned above, an estate can be administered in a supervised or unsupervised fashion. Personal Representatives have many legal and fiduciary duties, regardless of their level of court supervision. Their job is often thankless, time-consuming, and stressful.

The Duties of a Personal Representative

Collecting the Assets, Inventory and Appraisal: The Personal Representative must locate and secure the decedent’s assets and create an inventory (or list describing the asset and its value) of all assets. The inventory must be filed or mailed to all interested persons within three months of appointment. (usually within 90 days of appointment). The inventory will include a valuation of all assets. During this period, the Personal Representative should also receive a tax identification number for the estate and open an estate checking account for the (potential) deposit of estate funds.

Notifying Creditors

The Personal Representative must notify known creditors. They must also attempt to find unknown creditors, typically accomplished by publishing a legal notice in a newspaper in the county where probate occurs. The Personal Representative must then determine the validity and priority of all creditor claims they receive. The Probate Clerk will file that notice for you if you wish. The benefit of having the Probate Clerk file the notice to creditors is that it is likely to comply with the statute, and the fee is no more than you would otherwise pay.

Paying Debts of Decedent

The Personal Representative must pay all debts of the decedent and claims against the estate. If there is insufficient liquidity in the estate to pay all debts and creditors, the Personal Representative may negotiate on behalf of the estate or even deny certain claims. Paying expenses of administration: The Personal Representative must ensure all expenses of administration of the estate are paid. Expenses, such as court costs and attorney fees, are paid from the estate before valid creditor claims. Importantly, the Will itself, and the Maine probate code allow for the Personal Representative to receive payment for the time spent during administration. The reasonable costs, and expenses have priority over creditor claims. Payment rates for a Personal Representative vary by state. If a Personal Representative is paid out of estate funds, the Personal Representative individually reports this payment as income, while the estate reports the payment as an expense on the estate tax return. It is also important to claim the fee as income on your personal tax return. The state and federal taxing authorities sometimes audit Personal Representatives personal income tax returns to determine if the expense item listed on the estate tax return for the fee of the Personal Representative actually shows up on the income tax return as income to the Personal Representative.

Maintain estate accounting records. Personal Representatives must maintain accounting records as proof of monies coming into and going out of the estate.

Filing and paying taxes

A Personal Representative must ensure the decedent’s final tax return is filed by April 15th of the year following the decedent’s death. He or she may have to file past income tax returns if it is discovered the decedent had to file but did not do so during his or her lifetime. If the estate earns income after the decedent’s death, the Personal Representative must file estate income tax returns. Finally, a Personal Representative may have to file an estate tax return if required by law or needed for further tax planning. It is highly recommended that a Personal Representative seek professional tax advice.

Distributing Assets to Rightful Heirs/Devisees

Once the above steps have been accomplished or satisfied, the Personal Representative must distribute any remaining estate assets to the rightful heirs or devisees. Distributing estate assets may include specific devises, or the Personal Representative may have to distribute assets in certain proportions to certain individuals. Barring specific instructions in a Will, distribution of estate assets must be done in an impartial and fair manner.

Closing the estate

After completing all administration steps and fulfilling all duties as Personal Representative, he or she may close the estate. Closing an estate may be done formally or informally. The informal closing of an estate is done through certain pleadings and without a hearing. In Maine you can close an estate with a sworn statement filed in Court, so long as it is filed within 6 months of the date of appointment. In reality in all but the simplest of estates, it is typically impossible to complete an administration within six months.

Formal closing of an estate requires a petition by the Personal Representative, the court’s approval of the final estate accounting, and a hearing. If satisfied, the court will issue a formal discharge of the Personal Representative.

Unsupervised Administration

If no extenuating or contentious circumstances exist in an estate or among the relevant parties, administration of the estate occurs without direct court supervision. There are prescribed timelines during which a Personal Representative must accomplish the duties set forth above, but not all documents are filed with the court or even served upon all parties. Because Personal Representatives are fiduciaries held to a higher level of care and personally liable for any breach of their duties, they are well advised to proceed through unsupervised administration as if the court could review any of their actions and documents. Practitioners therefore often advise Personal Representatives to submit documents to a court and serve them upon all parties proactively.

Supervised Administration

Supervised administration or supervised probate requires court oversight and approval of the actions of a Persona! Representative. Reasons for supervised administration of an estate {and supervision of the actions of a Personal Representative) include but are not limited to contentions between parties, heirs, creditors, and other interested persons, and questions or controversies surrounding a Personal Representative’s actions.

During supervised administration, all pleadings and required documents are submitted to the court for approval and served on all interested persons for review and potential objection. This process is expensive and time-consuming. In controversial cases, each administration requirement or action taken by the Personal Representative poses a potential roadblock to closing the estate. For example, an estate inventory can be objected to because it did not contain what the parties believed the decedent owned or a party believes the value attributed to an asset was too high or too low or even requires a new valuation.

This objection can result in several responses between interested parties and the dissatisfied party requesting a formal hearing in front of the judge. The estate will then incur additional expenses, including attorney fees, when the Personal Representative prepares for the hearing and defense of the estate inventory. The judge may require a full hearing and issue an order to resolve the inventory objection, or the judge may order the parties to mediate the inventory issue. Estates undergoing supervised administration often take years to settle and close.

 

Should You Hire a Lawyer to Probate the Will? 

In further answer to this question, consider the complexity of the probate process. Also, consider the unexpected results that some of the probate provisions can cause, as outlined in this article. Think also, about the fact that the probate code is four hundred pages long and consists of two hundred forty thousand words.

At a minimum your probate lawyer was required to complete seven years of post-high school education, take a three-day exam, and complete twenty hours of mandatory continuing education every year. In addition to the mandatory education, we take at least forty hours more and belong to national organizations of elder law and estate planning attorneys.

When faced with the complexity and possible unwanted outcomes of the probate process, there is good news for you! If you are reading this article, you have time to make an estate plan! A good estate plan will ensure that your wishes are carried out. Your wishes, and not the default probate rules. Our mission at the Penbay Estate Planning Law Center is to create custom estate plans that preserve family wealth and prevent family conflict. If we can translate your goals and concerns into an estate plan that avoids probate, that does not give notice to the persons interested in contesting your estate, that does not rely on the clumsy imprecise tools of the POD or joint account, or the transfer on death deed, we will have succeeded. And that is good news, because it will be far less expensive both in time, money, and emotional turmoil than relying on the probate code.

 

 

 

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