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101 Probate To-Do/Know List

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Responsibilities pertaining to an Executor or personal representative:

101 Probate List

1. Determine and carry out the decedent’s wishes with respect to funeral, burial, cremation, etc.

2. Obtain the Death Certificate decedent's wishes with respect to funeral, burial, cremation, etc.

3. Locate the original Will, or Trust

4. Maintain the decedent's home

5. Locate and protect the Assets, including decedent's property

6. Prepare a complete inventory of all assets owned by the decedent at the time of death

7. Inventory is submitted to the court appointed probate referee

8. Take possession of all the estate's property insofar as practicable

9. Collect all dividends, interest and other income, and deposit all such items in an interest-earning estate bank account (or accounts) until the estate is closed

10. Assets listed in the inventory plus certain other non-probate assets (such as life insurance, joint tenancy property, and trust assets) comprise the decedent's estate for tax purposes

11. Pay Bills and Taxes

12. File all tax returns

13. Sign the Federal Tax return

14. Keep a detailed account of all receipts and disbursements for the estate

15. Keeping careful records is essential

16. Keep estate property adequately insured

17. Provide for support of the decedent's dependents

18. Notify the State Director of Health Services (if the decedent was receiving Medi-Cal benefits)

19. File a petition with the Superior Court asking that the Will and any codicils (amendments) to the Will be admitted to probate as the decedent's Will

20. Thoroughly check the decedent's records and personal effects for evidence of creditor's claims

21. Be careful with payment of claims

22. Make certain that insurance coverage on insurable assets are kept up to date and that the insurance amounts are adequate in light of the asset's appraised values

23. Do not commingle one's own funds with estate funds

24. Personal representatives are responsible for filing estate fiduciary income tax returns

Be aware of the following topics:

Issuance of Letters

25. Within 30 days after the decedent's death, the person who has custody of his or her Will must file it with the County Clerk in the county of the decedent's residence and send a copy to the named executor

26. Certified copies of the Letters Testamentary (of Administration) may be requested by banks, title companies, transfer agents, tax authorities and others

Notice to Creditors

27. A Notice to Creditors serves to advise all known creditors of the decedent

28. A Notice of Petition to Administer Estate published in the newspaper constitutes notice to all unknown creditors of the decedent

29. Creditors have 4 months following executor appointment and the issuance of The Letters within which to file their claims

Inventories and Appraisals

30. Independent appraisal of any real property or other estate assets may be advisable

31. Fees paid to appraisers are proper expenses of the estate and can be claimed as estate or income tax deductions

Estate Bank Accounts

32. Cash and un-cashed checks in the possession of the decedent at the time of his or her death, except for cash in savings accounts, should be deposited in the estate checking account

33. All disbursements from the estate checking account should be made by check

34. Substantial amounts of estate funds should not be kept for any appreciable period in the estate checking account

35. Instead, funds not required for current expenditures and distributions should be kept in an interest-earning estate savings account

36. The decedent's savings accounts, if any, should be transferred into the estate's name

Records and Accountings

37. The record of estate receipts and disbursements will be needed in preparing the accounting required by the probate court

38. Checking and savings account records and statements supplied by stock brokers, trust company agents, mutual funds, and others provide much of the information needed to prepare accountings and tax returns

Notices of Fiduciary Relationships

39. The federal and California tax laws require that personal representatives notify the respective taxing authorities of their appointment and of their discharge

Taxpayer Account Numbers

40. Every estate that is required to file any federal tax returns must apply for an employer identification number, which is the estate's tax account number

Federal Estate Tax

41. The US government levies an estate tax based on the decedent's right to transmit property at death

42. The estate tax is normally paid by the estate

43. A Federal Tax return must be filed for the estate of a decedent if the estate has a "gross value" of $5,340,000 for decedents dying in 2014

44. Alternate valuation date: the date six months after the date of death

45. If the alternate valuation date is elected, the sale or distribution of estate assets can affect the federal estate tax due

46. Because of the opportunity to elect the alternate valuation date, the administration of the estate usually continues for at least one year

47. The federal estate tax return is due and estate tax must be paid nine months after the date of death

Gift Taxes

48. If the decedent made any gifts in the year prior to his or her death, it may be necessary to file federal and state gift tax returns

49. California no longer imposes a gift tax, but some other states still do

50. It may also be necessary to file delinquent gift tax returns for unreported gifts made by the decedent in prior years

51. Gift taxes paid after death are deductible on the estate tax returns, but any federal gift tax paid or payable with respect to gifts made within three years of the decedent's death must be included as an asset on the federal estate tax return

Income Taxes

52. Final income tax returns must be filed for the portion of the year prior to the decedent's death and are due by April 15th of the following year

53. Extensions of time to prepare such returns can be obtained if necessary

54. An estate is a separate taxpayer for federal and state income tax purposes

55. A federal fiduciary income tax return (Form 1041) must be filed for any beneficiary is a nonresident alien

56. A California fiduciary income tax return (Form 541) must be filed for any tax year in which the estate earns $1,000 or more of net (taxable) income, or gross income of $10,000 or more

57. The personal representative may select a fiscal year for the estate

58. Selection of a fiscal year may permit some reduction of total tax liability or at least a deferral of some tax liability

59. Unlike an individual, an estate is entitled to an income tax deduction for amounts of income or principal paid or distributed to certain beneficiaries during the year, who must in turn include those amounts in their income tax returns for that year

60. Significant income tax savings may be possible by proper planning

Real Property Taxes and Change of Ownership Forms

61. The personal representative plans to pay all real property taxes when due

62. The first installment of taxes on California real property is delinquent on December 10th, and the second installment is delinquent on April 10th

63. The county assessor of each county in which the decedent held real property must be notified first of the change of ownership from the decedent to the estate, and then upon distribution of the real property from the estate to the beneficiary

64. The change of ownership may result in a reassessment for property tax purposes, depending on the relationship of the transferee

Expenses of Administration and Compensation of Personal Representative and Attorneys

65. The expenses of administering estates vary depending on many factors, only one of which is the size of the estate

66. The expenses of administration may include court fees, certification fees, surety bond premiums, the California probate referee's fees, agency fees, insurance premiums, expenses of selling assets, and the personal representative's, accountant's and attorney's compensation

67. The largest costs are usually the compensation of the personal representative and the attorneys

Compensation of Ordinary Services for Personal Representative and Attorneys

68. A personal representative is allowed compensation for their services

69. Unless the Will makes special provision for compensation, the amount of compensation for "ordinary" services is fixed by California statute and is based on the value of the estate accounted for

70. This value generally includes the inventory value of the probate estate and income received during the period of administration

71. Compensation can be paid only after the court orders payment

Compensation for Extraordinary Services of Personal Representative and Attorneys

72. In addition to the statutory compensation discussed above, the probate court may, in proper instances, authorize payment of additional compensation to the personal representative and/or to the estate's attorneys for "extraordinary" services rendered in the administration of the estate

73. There is no prescribed schedule of compensation for such services

74. The amount in each instance is fixed by the court on the basis of a declaration by the applicant as to the nature and extent of the extraordinary services rendered to the estate

75. We as attorneys (and our paralegal assistants) are frequently called upon to perform legal services in connection with the administration of an estate that are regarded as extraordinary in nature and are not covered by the statutory compensation provided for by the Probate Code

76. Such services commonly may include: handling sales or mortgages of real or personal property; contesting or defending litigated claims against the estate; preparing the federal and/or state estate, inheritance, gift, income, sales, property, or other tax returns representing the estate in an audit for litigation concerning any of those taxes; handling litigation relating to property of the estate; arranging for ancillary administration in other states where the decedent owned property; and preparing petitioner for instructions, to determine heirship, and for preliminary distribution

Agents for Personal Representatives

77. An individual who is not an experienced fiduciary is entitled to receive the statutory compensation for serving as a personal representative, even though he or she does not have the training or experience required to perform all the personal representative's duties

78. We have found that many estates can be more efficiently administered if a nonprofessional personal representative hires others to perform some or all of the services that he or she is expected to perform

79. However, a personal representative is generally not entitled to reimbursement from the estate for the expenses incurred for such services

80. Most courts consider such expenses to be expenses of the personal representative, which must be paid from his or her compensation

81. If the personal representative wish to engage an agent to perform ministerial function, there are several alternatives available

82. Banks and some accountants serve as probate agents

Waiver of Representative's Compensation

83. Compensation paid to a personal representative is taxable income to him or her

84. Under some circumstances, a personal representative who is also a beneficiary may benefit by waiving his or her right to receive compensation

Family Allowance

85. During the probate of an estate, a surviving spouse and minor children are entitled to a family allowance for their support, commencing with the date of death and continuing until further order of the court

86. The family allowance is obtained through a petition to the court, which settles the amount to be allowed

87. If a family allowance is considered advisable, we will take the necessary steps to obtain it

88. A family allowance will be taxable as income to the recipient

Preliminary Distributions

89. It is not necessary to wait until the estate is ready to be closed before making any distributions

90. The Probate Code specifically provides for preliminary distributions

91. However, a preliminary distribution may not be made before two months after the Letters Testamentary or of Administration are issued

92. If a distribution is made between 2 and 4 months after Letters are issued, a bond may be required to protect the rights of creditors

93. If a distribution is made more than 4 months after the Letters are issued, that is, after creditors' claims are barred, a bond is not usually required

94. A personal representative may want to make a preliminary distribution of any cash or other specific bequests provided for in the Will

95. A personal representative may also want to make a preliminary distribution of income or principal to establish a trust created by the decedent's Will

96. Income tax considerations may affect the proper timing of distributions and may make it preferable to delay any substantial distributions other than those to specific, demonstrative, and general legatees

97. An appropriate court order is required before the personal representative makes any preliminary distribution

Final Distribution

98. When all debts and taxes have been paid and the estate is ready for final distribution a petition should be made for final distribution, often with the help of an attorney, based on all records of receipts, disbursements, and assets on hand

99. If all is in order, the court will enter an order approving the personal representative's account and report and ordering distribution of the remaining estate assets

100. This normally takes approximately three weeks after the petition is filed

101. A personal representative, often with the help of an attorney, then distributes the assets and obtains the necessary receipts from the beneficiaries

Update August 27, 2015

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-Referenced California Practice Guide, The Rutter Group

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