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Concerns of the Elderly and Disabled: What is Probate?
Why Probate? What is probate?
When a person dies, all property which does not pass directly to others (such as jointly owned property and life insurance payable to a named beneficiary) is subject to a legal proceeding called "probate" under state law. This proceeding takes place under the jurisdiction and supervision of the Probate and Family Court (the "court") for the county where the deceased person (the "decedent") resided.
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, who may be an individual or a bank, to administer the decedent's estate. Third, the court will supervise the administration of the property subject to probate (the "probate estate").
Why is probate necessary?
The purposes of a probate proceeding are:
a. To collect the decedent's probate assets;
b. To protect and preserve the property of the estate;
c. To pay all debts and taxes;
d. To 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, that the persons properly entitled to the property receive it, and that the personal representative receives the protection afforded by statute and by the court's approval of his actions.
There may be special circumstances where all persons interested in an estate, by common consent after review with their attorney, conclude that formal probate proceedings are unnecessary. However, anyone who undertakes to deal with the probate property of a decedent without qualifying himself as an executor or administrator exposes himself to personal liability for his conduct. He should be fully advised by counsel before acting in this manner, even in a case where it may be appropriate.
What is involved?
The person seeking appointment as 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 the 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:
a. Take possession of and preserve the personal property of the decedent;
b. Collect all income, such as rents, interest, dividends, and make demand and collect all debts, claims and notes due to the decedent;
c. Assist in determining the names, ages, residences and degrees of relationship to all heirs-at-law and next of kin of the decedent;
d. Complete any pending lawsuits in which the decedent had an interest;
e. Carry out all orders and judgments of the Probate and Family Court;
f. Determine and pay all state and federal estate and income taxes;
g. Pay the valid claims of creditors of the decedent and, where necessary, sell property to raise funds to pay such claims as well as taxes and expenses of administration;
h. Distribute the remaining assets to the proper persons.
Probate procedures 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.
Personal representative
If the decedent leaves a will, it ordinarily names a personal representative who is usually referred to as an "executor." If the decedent leaves no will, the personal representative would be referred to as an "administrator." The laws of Massachusetts set forth priorities with respect to who 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 on all taxes due by reason of the decedent's death.
The probate judge
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 without involvement 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 thereafter enter appropriate judgments and orders.
How long does probate take?
The initial step of petitioning for the allowance of the will (or the administration of the estate) and appointment of a personal representative usually takes six to eight weeks from the date of the filing of the petition, which may be prepared and filed immediately following the death of the decedent. State and federal estate tax returns and payment of the taxes are due nine months from the date of death. Although a partial distribution may be made prior to the complete settlement of the estate, final settlement, because of tax complexities, may take from one and a half to two and a half years. However, the vast majority of the work is usually completed in the first nine months following the death.
Taxes
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 the state and federal estate tax returns can exist even if the decedent left no probate estate. This is due to the fact that jointly held property, life insurance and certain types of transfers by the decedent prior to death are subject to taxation by the state and federal government. A great body of law has evolved with regard to the federal estate tax and the Massachusetts estate tax, and a personal representative should not attempt to draft the necessary returns, compute the taxes due or meet the necessary filing requirements without the supervision and guidance of a lawyer.
Fees and costs
The fee of the personal representative is not fixed by any statute 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 fee for services rendered to the personal representative. The fees of the personal representative and the attorney are subject to the approval of the Probate and Family Court.
Small estates
The laws of Massachusetts provide that where the decedent leaves an estate, with or without a will, consisting entirely of personal property of a total value of less than $15,000, together with a motor vehicle, a simplified proceeding may be used instead of a formal probate proceeding. 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.
Jointly owned property
Joint tenancy is a form of co-ownership of property where two or more persons own the property together. On the death of one joint owner, the ownership of the property normally 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 the transfer and there may be undue and unnecessary estate tax complications at the death of any one of the joint owners.
Your 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 where 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 a will, your probate property will be distributed according to the laws of intestate succession, which is an inflexible, arbitrary formula governing the disposition of one's property.
Anyone in possession of a will of a deceased person must file the 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.
How to Get Help
If you need a lawyer and don't know how to find one, you may contact the Massachusetts Bar Association's Lawyer Referral Service. The number in Boston is (617) 654-0400 or TDD (617) 338-0585. Outside Boston you may call toll-free 1-800-392-6164. There is no charge to call the Lawyer Referral Service, and your first half-hour consultation with an LRS attorney is only $25.
The Massachusetts Bar Association also offers free help through its Dial-a-Lawyer call-in program. On the first Wednesday of each month, from 5:30 to 7:30 p.m., volunteer lawyers are available to answer your basic legal questions by phone. Dial-a-Lawyer may be reached at (617) 338-0610.
Masslawhelp is a public service of the Massachusetts Bar Association.Posted on Apr 28, 2000 |
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