Honoring Your Loved One’s Wishes: How to Start Administering an Estate

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Enduring the death of a loved one puts agonizing strain on you and your immediate family. If you’ve been appointed the Personal Representative of your loved one’s estate, it may seem overwhelming to think about the responsibility that entails. The Personal Representative is the person named in a will, or appointed by the Orphan’s Court, to administer an estate. This guide will help you walk through important processes and empower you to get through mournful times.

Personal Representatives – Who Are They? What Do They Do?

Before diving into more complicated matters, a Personal Representative can tidy up a deceased loved one’s personal affairs. Around the deceased’s home, it would be wise to arrange for the care of dependents and pets, as well as disposing of perishable food and ensuring a security system is in place. If you have access to your loved one’s mail and email, go through it to see which accounts can be canceled, and which personal records need to be preserved. The deceased’s personal identification documents (e.g., driver’s license and passport), should be returned to the issuing authority. Where the deceased still have title to their home and vehicle, contact their insurance provider to find out if coverage extends into the probate process. If you have power of attorney over the deceased, that will expire at the time of death. This means that before the court appoints a Personal Representative, you cannot write any checks.

Leading up to probate, it would be wise to secure access to your loved one’s real estate or personal property. In addition to physically securing property, gather all documents establishing title to that property, and compile all correspondence you’ve had with any creditors since your loved one’s death. Then, contact a competent estate attorney licensed to practice where the decedent lived or owned property. They will serve as a crucial intermediary between yourself, the court, and third parties with a claim on the estate. They will also provide you with the means to plan how to dispose of the estate’s assets, once a Personal Representative has been appointed.

Do I Have to Go Through Probate? How Do I Get Started?

Assets in the deceased’s name alone, that have no beneficiary designated at the time of death, and no joint owner, will typically pass through probate. For a will to have legal effect, it must be filed with the office of the Register of Wills in the county where the deceased resided at the time of their death. This should be done first, and as soon as possible! Ancillary administration may also take place in secondary jurisdictions where property is located. When opening the probate file, the deceased’s assets must be reported to the Register of Wills on an inventory. And, the Register of Wills or the Orphan’s Court appoints the Personal Representative so they can dispose of the assets on behalf of the estate. Typically, the person named as the Personal Representative in the will is appointed, but challenges are not uncommon in probate.

The administration process begins once the Personal Representative receives Letters of Administration from the court, granting them the legal authority to administer the estate of the deceased. Across states, a Personal Representative is generally expected to take possession of the decedent’s assets, pay off the decedent’s outstanding income and property taxes, as well as any lingering inheritance or estate taxes. File any outstanding taxes that are due. Besides furnishing those tax returns, a Personal Representative must provide an accounting, that is, a list of assets that make up the estate, and any transactions involving those assets. The Personal Representative must also ensure the decedent’s debts are paid, and that the estate covers any administrative costs. In addition, a surety bond may be required. These bonds are often required by the court to guarantee distribution of the estate’s assets. These bonds could run as little as $150.00 but may cost more depending on the size of the estate and the amount a court may require a bond to cover.

When Creditors Come Calling

Creditors will demand repayment throughout the whole process. Creditors must be paid in accordance with the priority set by state statute. Generally, a creditor must file and perfect a claim on the estate to establish the order in which they get paid. And, those claims generally fall behind the costs of the administering the estate, funeral expenses, and federal and state taxes. It’s very important to track when creditors get in contact with you, as that effects their ability to recover from the estate. In Maryland, creditors must file their claim within six months of the decedent’s death, or they have two months after the Personal Representative provides them written notice informing the creditor that their claim will be barred, otherwise the creditor cannot recover without filing a claim. Smart Personal Representatives will budget for administrative and funeral costs, and estate taxes, as soon as they have gathered all the estate’s assets. They save themselves their peace of mind by consulting counsel before responding to any creditor.

Maryland statute places general creditors at the bottom of the order of payment, hence why they’ll be quick to contact you or file claims with the court. Smart Personal Representatives will hold off on paying any creditors before the expiration of the six-month period following the decedent’s death. This would open up the Personal Representative to liability in the event a creditor thinks it has been slighted. Ultimately, the court will sort out the order and amount of payments due to creditors once all claims are before it. But, before a court date is set to adjudicate the claims, it is important to consult with an attorney to determine which claims to allow or deny. Smart Personal Representatives will bide their time over the six-month statutory period, and judiciously deny claims, protecting them from personal liability. Great care should be taken in determining which claims are valid and viable. Personal Representatives greatly benefit from legal counsel in making such determinations.

Jeffrey D. Katz is the founder and managing partner of JDKatz, PC. He practices in the areas of tax, estate planning, estate administration, and corporate law.

Joseph M. Fiocco is a legal extern with JDKatz, PC, completing his third year of law school at the University of Maryland Carey School of Law.