An Introduction and Overview
This post is the first in a three-part series about probate. In this post we will review the basic probate process, define terms and identify the various parties involved. The next post will examine whether and why you should try to avoid probate, and the third post will examine techniques to avoid probate.
Probate is the term we use to describe is the court-supervised process of transferring property out of the name of the deceased person (the “Decedent”) into the names of the beneficiaries under the Decedent’s Will. Another term used is “Estate Administration.”
First, some terminology: The word “probate” is derived from the Latin word meaning “to prove” because the first step in probate is to prove that the document being presented as the Decedent’s Last Will and Testament (hereafter “Will”) is actually their Will. The person presenting the Will for probate is the Personal Representative. In the past, the term “Executor” or “Executrix” (for women) was used, but in Maryland, now, we use the term Personal Representative, often abbreviated to “PR”. The court that oversees the probate process is called the Orphan’s Court (unfortunately), but most PRs deal primarily with the Register of Wills, which is responsible for “appointing personal representatives to administer decedents’ estates and for overseeing the proper and timely administration of these proceedings.” (quote from the Register’s website). The Register’s office is an enormous resource to a PR. There are three basic filings made during the course of Administration: Opening the Estate, Filing the Inventory and the Account and Distribution. In addition to the filings, the PR is responsible for paying off any outstanding bills, selling assets as directed (such as a home or stocks) and generally wrapping up the Decedent’s worldly affairs.
Step 1: Open the Estate The probate process begins when the PR files a Petition to Probate the Will with the Register of Wills. The Petition must include information about the Decedent, what they owned, the heirs, where the Will was found, and of course information about the proposed PR. This initial filing should be accompanied by a death certificate. Notice must be given to all “interested persons” to the Estate, and they have an opportunity to contest the appointment. If the Petition is successful, the PR is appointed and the Estate is opened. The PR will receive Letters of Administration which show the PR’s authority over the Estate, and will allow the PR to gather the assets of the estate for distribution. The PR must obtain a bond to insure the Estate against any losses incurred by the PR’s actions.
Step 2: File the Inventory Within three (3) months of being appointed, the PR must file an Inventory of the Estate’s assets with the Court, through the Register. This Inventory is important because it is the starting point for understanding what the Decedent owned, in total, so that the Court may oversee that the PR distributes the assets according to the law and the Will.
In Maryland, creditors have six (6) months to come forward and make a claim against the Decedent’s estate. Creditors’ claims must be satisfied before the PR may distribute any assets of the Estate to beneficiaries.
Step 3: Account for Transactions, Distribute to Beneficiaries and Close the Estate If, after 6 months, all creditors have been paid and there are assets remaining in the Estate, the PR may begin to distribute the assets of the estate to the beneficiaries. These distributions must be approved by the Court before they may be made. The PR seeks approval for the proposed distributions from the Court through an Accounting. The Accounting can be a fairly arduous filing to prepare because it must account for all assets that flowed into (think: interest/dividends on accounts) and out of (think: electric bill at the Decedent’s house) the Estate during the course of Administration. If the final Accounting is approved (and none of the interested persons objects to the Accounting) the PR may distribute the assets and close the estate.