Probate - Where There's a Will, There's a Way - to the Massachusetts Probate Court!
I have been asked over and again by my blog readers to give a simple outline of what needs to be done upon someone's death. So, because it is both a popular subject and really something that everyone will need to address in one manner or another, here goes.
In Massachusetts, probate is the process by which a deceased person's property, known as the "estate," is passed to his or her heirs and legatees (people named in the will). The entire process, supervised by the Massachusetts probate court, usually takes a little longer than a year. However, substantial distributions from the estate can ordinarily be made in the interim so long estate tax and creditor obligations can be determined with some degree of certainty. The emotional trauma brought on by the death of a close family member often is accompanied by bewilderment about the financial and legal steps the survivors must take. The spouse who passed away may have handled all of the couple's finances. Or perhaps a child must begin taking care of probating an estate about which he or she knows little. And this task may come on top of commitments to family and work that can't be set aside. Finally, the estate itself may be in disarray or scattered among many accounts, which is not unusual with a generation that saw banks collapse during the Depression.
Here we set out the steps the surviving family members should take. These responsibilities ultimately fall on whoever was appointed executor or personal representative in the deceased family member's will. Matters can be a bit more complicated in the absence of a will, because it may not be clear who has the responsibility of carrying out these steps.
First, secure the tangible property. This means anything you can touch, such as silverware, dishes, furniture, or artwork. You will need to determine accurate values of each piece of property, which may require appraisals, and then distribute the property as the deceased directed. If property is passed around to family members before you have the opportunity to take an inventory, this will become a difficult, if not impossible, task. Of course, this does not apply to gifts the deceased may have made during life, which will not be part of his or her estate.
Second, take your time. GRIEVE. You do not need to take any other steps immediately. While bills do need to be paid, they can wait a month or two without adverse repercussions. It's more important that you and your family have time to grieve. Financial matters can wait. (One exception: Social Security should be notified within a month of death. If checks are issued following death, you could be in for a battle. For more on Social Security's death procedures, click on http://www.ssa.gov/pubs/deathbenefits.htm)
When you're ready, but not a day sooner, give me or another Massachusetts probate lawyer a call to review the steps necessary to administer the deceased's estate. Bring as much information as possible about finances, taxes and debts. Don't worry about putting the papers in order first; as full service probate lawyers, we have experience in organizing and understanding confusing financial statements. The exact rules of Massachusetts estate administration differ are complex, so it is best to speak with a probate lawyer. In general, they include the following steps: 1. Filing the will and petition at the Massachusetts probate court in order to be appointed executor or personal representative. In the absence of a will, heirs must petition the court to be appointed "administrator" of the estate. 2. Marshaling, or collecting, the assets. This means that you have to find out everything the deceased owned. You need to file a list, known as an "inventory," with the probate court. It's generally best to consolidate all the estate funds to the extent possible. Bills and bequests should be paid from a single checking account; our law firm would establish and help you administer this account, so that you can keep track of all expenditures. 3. Paying bills and taxes. If an Massachusetts (or Federal) estate tax return is needed---generally if the estate exceeds $1 million in value---it must be filed within nine months of the date of death. If you miss this deadline and the estate is taxable, severe penalties and interest may apply. If you do not have all the information available in time, you can file for an extension and pay your best estimate of the tax due. 4. Filing tax returns. You must also file a final income tax return for the decedent and, if the estate holds any assets and earns interest or dividends, an income tax return for the estate. If the estate does earn income during the administration process, it will have to obtain its own tax identification number in order to keep track of such earnings. Our law firm has a CPA on retainer to make all of this simple and easy for our probate clients. 5. Distributing property to the heirs and legatees. Generally, executors do not pay out all of the estate assets until the period runs out for creditors to make claims, which in Massachusetts is a year after the date of death. But, in many cases, once the executor understands the estate and the likely claims, he or she can distribute most of the assets, retaining a reserve for unanticipated claims and the costs of closing out the estate. 6. Filing a final account. The executor must file an account with the Massachusetts probate court listing any income to the estate since the date of death and all expenses and estate distributions.
Once the court approves this final account, the executor can distribute whatever is left in the closing reserve, and finish his or her work. Some of these steps can be eliminated by avoiding probate through proper estate planning and through the use of trusts. Whoever is left in charge still has to pay all debts, file tax returns, and distribute the property to the rightful heirs. You can make it easier for your heirs by keeping good records of your assets and liabilities. This will shorten the process and simplify things for your probate lawyer (thank you for that, by the way).
