PROBATING AN ESTATE

WHY DO I HAVE TO PROBATE AN ESTATE:

Maryland has a law REQUIRING you to file the existing Last Will and Testament with the proper Court, whether or not the deceased person has assets. This is not optional. If the deceased has any assets titled solely in their name alone, whether or not a Will exists, you must probate those assets by filing certain paperwork with the proper Court. Only the Personal Representative appointed by the Court (usually the person named in the Will) has the power to transfer assets of a deceased person. If a Power of Attorney exists, it is void as of the date of death and can no longer be used. If the deceased had a car, a bank account, or any other asset titled solely in their name, the Personal Representative is the only person who can change the title, collect funds, withdraw funds or take other actions on behalf of the deceased. Most institutions (such as banks and brokers) and government agencies (such as the IRS and Social Security) will only talk to the Personal Representative. Before the named Personal Representative can act on behalf of the deceased or the estate, the Court, during the probate process, must approve the named person by issuing Letters of Administration. It is the Letters of Administration that gives the Personal Representative power to act on behalf of the estate.

WHAT IS INVOLVED IN PROBATING AN ESTATE:

In Maryland, if the deceased dies owning assets solely in their name valued at less than $50,000 ($100,000 if the spouse is the sole beneficiary of the estate), the process is rather simple and is called a “Small Estate”. The Personal Representative named in the Will files the Will and a few forms with the Register of Wills. The Court will then issue Letters of Administration and no further Court action is required. The assets can then be managed and distributed by the Personal Representative without further Court filings. The vast majority of Maryland residents have assets in excess of $100,000.

If the Maryland deceased’s estate has more than $50,000/$100,000 in assets, the Will and several probate forms must be filed with the Register of Wills located in the Circuit Court of the County in which the deceased resided. Notice must be placed in a newspaper giving creditors and potential unknown heirs the right to file a claim, and the Personal Representative must obtain a bond in the amount determined by the Register of Wills. A bond is an insurance policy insuring against theft of estate assets by the Personal Representative.

Within twenty days after appointment the Personal Representative must file a list of “Interested Persons” (those persons named in the Will as a beneficiary, plus the heirs that would benefit if no Will exists). Within ninety days, the Personal Representative must file an “Inventory” which is a list of all assets the deceased owned solely in their name at death. Real estate and tangible personal property must be appraised.

Meanwhile, the Personal Representative must do a number of things, including but not limited to, paying all bills, collecting all income (such as dividends, interest and rents) managing all assets, preparing all tax returns, and filing (after six months but, before nine months), an Account with the court which states the items listed in the inventory, lists all changes to those assets such as sales, and reports all receipts and expenses. After this Account is audited by the Court and approved, the estate assets are distributed and the estate is closed. Sometimes additional time is needed, perhaps to sell real property, in which case additional Accounts are filed every six months.

Maryland has a third type of probate called a Modified Administration. This requires more paperwork than a Small Estate, but less than a regular probate – as described above. You must meet certain requirements to file a Modified Administration, so obtaining an attorney to assist you is recommended.

DO I NEED AN ATTORNEY?:

If the estate is a small estate (under $50,000/$100,000), you may want to handle the matter yourself or with the assistance of the Register of Wills in the local Circuit Court. If you are not completely comfortable or clear as to your duties and responsibilities, or need help with the probate forms, you can contact an attorney to assist you.

If the estate is a regular estate (over $50,000/$100,000), I recommend you obtain the services of an attorney to assist you. While there is no legal requirement that an attorney represent the Personal Representative, obtaining the assistance of an attorney that has experience with probating estates can help speed up the process and can help prevent potential problems and errors, some of which can have substantial repercussions. Most people do not have experience with managing an estate and do not realize the work and time that it can entail. An attorney with experience in probating estates will be familiar with the requirements and potential problems that are involved with estates.

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