In California, the probate process involves proving whether a will is valid. Once a will gets validated, the probate court appoints an executor or an administrator to oversee the distribution process. When there is no will or there is no person named in the will who is able to serve, the court appoints an administrator to manage the probate process. An executor/administrator has many sensitive responsibilities, which this article outlines.
One of the most important tasks of an executor is to identify the assets in order to determine if there are any property taxes or other fees that must get sorted out before distribution. Assets can include cash, investments, retirement accounts and real estate. In some cases IRAs must also go through probate, because the decedent did not name death beneficiaries.
Once the executor identifies the assets, it is important to identify any outstanding debts. These can include anything from medical expenses to student loans or credit card debt. The executor will be responsible for the process of notifying creditors, reviewing creditors’ claims, and paying just debts. In some cases, the executor will also be responsible for disallowing unjust debts, such as charges made on a decedent’s credit card after the date of death.
Notifying beneficiaries and heirs
It is the duty of an executor to provide all heirs and beneficiaries of the probate, and to keep them informed as required by law, throughout the probate process. The beneficiaries and heirs actually have a constitutional right to proper notice. Other parties, such as government agencies and reasonably ascertainable creditors, are also entitled to notice of the probate. The executor is personally responsible for ensuring that notices are given as required by law.
The final step in the probate process is distributing property among beneficiaries and heirs, as outlined in the will (or as required by law if there is no will). In most cases, beneficiaries can expect to receive property and assets with little or no tax consequences or other fees. However, where there may be tax consequences, the executor or administrator must take steps, such as collecting w-9 forms from heirs and beneficiaries, and possibly filing a Form 1041 tax return with the IRS. The executor of a will must distribute the assets in accordance with the terms of the will, and if there is no will, the administrator must distribute the assets in accordance with applicable law.
Who should act as executor or administrator?
An executor is named by the decedent in a will. An administrator is appointed when there is no will or when the executor in a will cannot or will not serve. Where there is a will, courts will give priority to the named executor and will only contravene the decedent’s wishes with good reason. If there is no will or no executor able and willing to serve, the court will apply a set of priorities set by the probate code in determining who the proper administrator should be. The executor or administrator needs to be able to handle many sensitive issues that may arise as a result of the probate process and estate administration, such as dealing with creditors, paying taxes, and selling real estate. The probate court has the power to appoint an executor or administrator, as well as remove an inappropriate executor.
The process of estate administration is a very sensitive and complicated one. Executors can be held personally responsible for mistakes or omissions. Probate can also be quite emotionally taxing for all parties involved. That is why an executor or estate administrator should have an experienced probate attorney ensuring that the probate process is handled properly.