Administering an Estate - An Overview

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This post will focus on administering an estate – what it is (definitions), what to expect, and timeframes.

You may have a will already prepared and filed in the Register of Wills Office for the county in which you are domiciled, but are you aware of what will occur after your death once your will is admitted to probate? Have you shared this information with your family? In this post, I will inform you of the definitions for the most basic terms used in the process as provided by the Register of Wills Office. I will also provide you with a general overview of Administering an Estate in the State of Maryland and inform you of the timeframes associated with Administering an Estate.

DEFINITIONS
Administration of an Estate – the management of a decedent’s assets, which includes the collection of property, payment of expenses and debts, and distribution to the heirs or legatees

Administrative Probate – a proceeding that is initiated by an interested person with the Register of Wills for the appointment of a personal representative and for the probate of a will, or the determination of intestacy of the decedent

Decedent – a deceased person

Estate – the property of a decedent

Information Report – the document that reports all non-probate property (property that passes outside the probate estate). (Non-probate property includes jointly held assets, life estate or remainder interests in a trust or deed, trusts in which the decedent had an interest, payable on death (P.O.D.) assets, and pension and benefit plans including IRAs with named beneficiaries)

Inheritance tax – a tax imposed on the privilege of receiving property from a decedent’s estate

Heir – a family member who inherits from an estate under the laws of intestacy (decedent died without a will)

JudicIal probate – a probate proceeding conducted by the Orphans Court (as opposed to the Register of Wills) when the situation prohibits administrative probate (validity of the will is questioned, will is damaged, more than one qualified person applies for personal representative, etc)

Legatee – a person named in a will to receive

Letter of Administration – a document issued by the Register of Wills that authorizes a personal representative to administer an estate

Limited Order – an order allowing for the search of assets in the decedent’s name alone or the will located in a safe deposit box in the name of the decedent

Lineal heir or legatee – one who is of the direct line of the decedent

Modified Administration – a streamlined version of administrative probate available to the personal representative (in estates where the decedent died on or after 10/1/97). In lieu of an inventory and account, the personal representative is required to file a final report within 10 months from the date of appointment

Net estate – property remaining after the deduction of liens, debts and expenses

Petition to Probate – the document required to initiate a probate proceeding

Probate estate – property owned solely by the decedent or as a tenant in common

Regular estate – the estate procedure for a decedent who owned probate assets with a gross value in excess of $30,000 (or $50,000 if the sole heir or legatee is the surviving spouse)

Small estate – the estate procedure for a decedent who owned probate assets with a gross value of $30,000 or less (or $50,000 or less if the sole heir or legatee is the surviving spouse)

ADMINISTERING A REGULAR ESTATE IN MD
Before administering an Estate, the will of the decedent must be filed with the Register of Wills in the county where the deceased was domiciled at the time of death. Once the Register has the decedent’s will, the process of administering the estate can begin. The Petition for Administration (Form 1112) and Schedule A (Form 1136) are the forms that initiate the opening of an estate. The Petition indicates who is applying to open the estate and Schedule A lists the amount of assets and debts of the estate. The Notice of Appointment (Form 1114) must be filed with the Petition. This Notice is published for three consecutive weeks to put others (other persons, creditors) on notice that a personal representative has been appointed and that a will may be admitted to probate. If a person wishes to avoid notice requirements they may file the Waiver of Notice (Form 1101) to avoid notice requirements. The Nominal Bond (Form 1116) or the Bond of Personal Representative (From 1115) must also be filed. The List of Interested Persons (Form 1104) may also be filed with the petition, but must be filed within 20 days after appointment.

If the person applying to administer the estate is not a Maryland Resident, the Appointment of Resident Agent (Form 1106) will need to be completed and filed. Additionally, if the proper person is not applying to administer the estate, the Consent to Appointment of Personal Representative (Form 1118) is required by all interested persons who have greater priority.

The duties and powers of a personal representative begin when the Letters of Administration are issued by the Register to those named in the will, a spouse, children, creditors or any other person.

The Register of Wills will also provide a schedule of mandatory filing deadlines. For instance, within 20 days the Personal Representative must provide the Register with copies of the Notice of Appointment; within three (3) months, complete the Inventory and Information Report; and within nine (9) months, file an accounting with the Register. The final approval of the final account by the Register automatically closes the estate.

Please refer to the link above for more specific information or contact the Register of Wills Office in your county for details on administering a regular estate.


ADMINISTERING A SMALL ESTATE IN MD
Before administering an Estate, the will of the decedent must be filed with the Register of Wills in the county where the deceased was domiciled at the time of death. Once the Register has the decedent’s will, the process of administering the estate can begin. The Petition for Administration (Form 1103) and Schedule B (Form 1137) are the forms that initiate the opening of an estate. The Petition indicates who is applying to open the estate and Schedule A lists the amount of assets and debts of the estate. The Notice of Appointment (Form 1109) must be filed with the Petition unless the values of the assets in the estate are less than the allowances . This Notice is published once in a newspaper of general circulation to put others (other persons, creditors) on notice that a personal representative has been appointed and that a will may be admitted to probate. If a person wishes to avoid notice requirements they may file the Waiver of Notice (Form 1101) to avoid notice requirements. A Waiver of Bond (Form 1117) may also need to be filed. The List of Interested Persons (Form 1104) may also be filed with the petition, but must be filed within 20 days after appointment.

If the person applying to administer the estate is not a Maryland Resident, the Appointment of Resident Agent (Form 1106) will need to be completed and filed. Additionally, if the proper person is not applying to administer the estate, the Consent to Appointment of Personal Representative of Small Estate (Form 1105) is required by all interested persons who have greater priority.

The duties and powers of a personal representative begin when the Letters of Administration are issued by the Register to those named in the will, a surviving spouse, children, creditors or any other person.

The Register of Wills will also provide a schedule of mandatory filing deadlines. You must make a reasonably diligent effort to ascertain the names and addresses of the decedent’s creditors and mail or deliver notice to those creditors and within three (3) months, complete an Information Report.

Please refer to the link above for more specific information or contact the Register of Wills Office in your county for details on administering a small estate.

**Administering an Estate may seem like a quick and easy process and in most cases, it is; however, there can be claims raised against an estate which will in effect prolong the process. Typically, many estates can be administered within a few months up to a year, but there are some that can take several years to administer depending upon a number of factors.

For more information on administering an estate, please contact the Register of Wills Office located in your county or a licensed Probate and Trust Administration Attorney.

PLEASE LOOK FORWARD TO OUR NEXT BLOG POSTING SCHEDULED FOR TUESDAY, MARCH 9, 2010 FOCUSING ON TRUSTS – THE BASICS.