Six Steps For A Successful Probate
NOTICE: Please note every states’ probate procedures are different. Contact a probate attorney located in the county and state where the decedent domiciled (resided) to identify the local statutes and procedures that apply. Robert Thomas serves Cook County, Lake County, McHenry County, and other surrounding counties.
Step 1 – Request Appointment with a Probate Attorney: In most cases, the person requesting the appointment is the personal representative (executor or administrator) and this person decides who to hire. It is a cost benefit to the estate to hire an experienced probate attorney to prepare and file the required paperwork to open the estate for probate, then to prepare the proper accounting reports and notices required by the court, and then to properly close the probate estate.
Step 2 – Prepare Notices to Heirs and Creditor Claims: The Law Office of Robert Thomas will prepare the appropriate Notices and mail the Notices to everyone named in the decedent’s Will (when there is a will) or to all known legal heirs (when there is no will) about the death of the decedent and the pending probate proceedings. (If the decedent died with a legally executed and funded Trust agreement(s), probate hearings are not necessary because the estate is settled under trust agreements). A Public Notice must also be published in the newspaper where the decedent lived to let creditors know about the pending hearing on opening the estate. Notice gives everyone notified an opportunity to object to admitting the Will and to the appointment of the executor, or personal representative. It also provides creditors six months to file a claim against the estate.
Step 3 – Probate Hearing: The purpose of the first hearing is to determine the validity of the Will and to appoint the executor, administrator or personal representative. The hearing may take place several weeks after the matter is file based on court availability.
If there is an objection to the validity of the Will, sometimes the Court will need the people who witnessed the decedent’s signature on the Will to sign a declaration, or an Affidavit. If there are no objections, the court will approve the petition and appoint the personal representative.
Step 4 – Identify Assets, Value the Assets, Manage the Assets, and Pay the Debts: This is the most time-consuming part the probate proceedings. The personal representative must identify, take possession of, and manage the probate assets until all debts have been paid and tax returns filed. This process usually takes about a year. The Law Office of Robert Thomas will prepare the interim accounting reports required by the court, the final accounting report required to close the estate, and the proper distribution of the remaining estate proceeds.
Depending on the terms of the Will (if there is a Will), and on the amount of the decedent’s debts, the personal representative may have to sell real estate, securities or other property. There are specific procedures the court may require the Executor to follow, so please consult with Robert Thomas prior to selling assets of the estate. For example, the Will may direct the executor to make cash distributions to the beneficiaries but the estate might consists mostly of valuable artwork or real estate. The executor would need to have the art work appraised and the real estate valued by a licensed appraiser, and then sold to produce cash. Or, if there are unpaid debts, the personal representative may have to sell some of the estate property to pay them.
Step 5 – Final Accounting Report Filed With Court: After paying the debts and taxes of the estate, the executor or personal representative must file a final accounting report with the court. The report accounts for all income received by the estate since the death of the decedent and all payments made on behalf of the estate. Bank statements, bills, and records of payments made are needed to properly account for the incoming and outgoing cash of the estate. The judge will review the accounting reports, and if approved, will then authorize the personal representative to divide the remaining property among the people or organizations named in the Will.
Step 6- Estate Closed: After the final accounting report is accepted by the court and the property or cash of the estate is transferred to its new owners, the Estate is formally closed.
Timeline of Estate Settlement
There are several things that must occur properly in settling the estate of a decedent. The process takes about nine (9) Months from the death of the decedent, but can take much longer depending on several issues that may arise.
Month 1: During the first month following the death of the decedent, the Will is obtained and read. The Executor will be identified, who will then have the fiduciary duty to speak with all named beneficiaries. The Executor must get several original death certificates (ten (10) is suggested). The funeral bill must be obtained and paid prior to the closing of the estate. The Executor must obtain documentation of all investments, certificates, insurance policies, contracts, bank accounts, and debts. The Executor should hire an experienced probate attorney to begin the judicial probate proceedings. The Law Office of Robert Thomas is experienced with handling probate matters.
Month 2: The Executor should provide the probate attorney with all required documents, such as the original Will and an original death certificate. Robert Thomas will file the original Will with the county court in which the decedent lived. He will prepare the required documents and reports needed to open the estate in court. The Executor CANNOT mail the notice. It must be mailed by another adult who is not a party to the case. Therefore, Robert Thomas will prepare and send required notice of the hearing to anyone who may have the right to get some part of the estate, plus the surviving family members even if there is a will and they are not named in it. Robert Thomas will also provide a copy of the Will to all beneficiaries.
Any person who is interested in the court case may file a Request for Special Notice (Form DE-154), which means that they must receive a copy of all paperwork filed by Robert Thomas throughout the probate proceedings. Once all required documents are filed, and all interested persons notified, the probate clerk sets a hearing date.
If required by the court, a surety bond will be issued. A surety bond protects the estate from any losses the Executor may cause (up to a certain dollar amount). The amount of the bond depends on the size of the estate. Public notification will be made for creditors to file claims against the estate for payment of money owed to them. Notices will also be mailed to all known creditors and documented for proof of notification to the court.
The first hearing will be held for the purpose of opening the estate and obtaining Letters of Office (Will) or Letters of Administration (no will). The probate judge will review the case very carefully and thoroughly during the hearing to verify it was done correctly. If necessary, the judge may need to decide who to appoint to be in charge as the personal representative of the estate (also called the “administrator” or “executor”) if one was not appointed. Once the probate estate is opened, Robert Thomas will apply for a federal identification number for the estate. The estate is required to file a federal tax return. The Executor should seek the advice of a professional tax preparer.
Month 3: The Executor and Robert Thomas will begin the preliminary inventory and asset valuation for the decedent’s estate. The assets will be documented, gathered, and valued. Depending on the directions of the Will the assets may need to be sold rather than distributed. Safe deposit boxes will need to be inventoried, documented, and valued. Upon completion of the valuation of the assets, the beneficiaries should notified.
Month 4: The value of the assets must be determined as of the date of death. Professional appraisals and updated account statements will need to be obtained. If the Will directs specific personal property to be distributed to specific beneficiaries, this may be done at this time. If property is sold, the executor must provide a report listing the property sold and the proceeds received from the sale. The money received from the sale of assets must be deposited into the estate account and held until the estate property is distributed.
Month 5: Robert Thomas will prepare the appropriate asset inventory report and begin to prepare the final accounting report for the closing of the Estate. The Executor will provide the tax preparer with all relevant documentation so the tax preparer may file the Federal Estate Return within nine months after death. Most estates are not large enough to owe federal estate tax. In addition, if required, the tax preparer will file a state estate tax return, usually within nine months after death. Fewer than half the states impose their own tax.
Month 6: As the interim, or preliminary accounting reports are prepared, the executor should provide copies to the beneficiaries in order to keep them properly informed. The Executor must pay the creditor claims which have been filed against the estate.
Month 7: Now that the debts of the estate have been paid, and the value of the remaining assets determined, preparation for distribution can begin. At this time all pending and unsettled issues should be addressed. All remaining bills should be paid. The funeral bill must be paid and a receipt must be provided to the court.
Month 8: The tax preparer will need to file the Federal Estate tax return, the Federal Income Tax 1040 & 1041 and any other tax returns applicable to the estate and the decedent. A final personal income tax return is prepared for the person who died. Robert Thomas will prepare the petition to close the estate and the final accounting report. The beneficiaries will be properly notified of the remaining estate assets to be distributed and they must sign off and agree to the stated distributions before the court will close the estate.
Month 9: Simultaneously, as Robert Thomas is closing the estate in court, the remaining assets are distributed to beneficiaries. The probate attorney will file all signed waivers, documents, reports and agreements with the court prior to closing the estate. The court will grant an order for discharge and the estate will be closed.