Chapter 4 - The Probate Process

Question 1

Define Abatement

Answer 1

The reduction in assets transferring to a legatee because the estate has insufficient assets to satisfy all the legatees.

Question 2

Define Ademption

Answer 2

Extinction of a legacy because an asset, specifically bequeathed to a legatee, has been disposed of prior to death.

Question 3

Define Administrator

Answer 3

A person, usually a relative of the deceased, appointed by the probate court to oversee the probate process when an executor has not been named.

Question 4

Define Ancillary Probate

Answer 4

Concurrent second probate process conducted in a non-domiciliary state in which the decedent owns property, which often requires the services of an attorney from that state, and separate court fees.

Question 5

Define Domicile

Answer 5

Where a person lives, location of their home.

Question 6

Define Estate Administration or Succession

Answer 6

The passing of property a death to surviving heir/legatees.

Question 7

Define Executor

Answer 7

Estate representative designated in the will by the decedent. An executor may service without bond if bond is waived by the decedent.

Question 8

Define Heir

Answer 8

One who inherits under state law.

Question 9

Define In Trust For (ITF) Accounts

Answer 9

A bank account utilizing a beneficiary designation.

Question 10

Define Legatee

Answer 10

One who inherits under the will.

Question 11

Define Letters of Administration

Answer 11

A legal document that affirms the power of the administrator to act as the agent of the probate court.

Question 12

Define Letters Testamentary

Answer 12

A legal document that affirms the power of the executor to act as the agent of the probate court.

Question 13

Define Pay-On-Death Bank Account

Answer 13

A bank account utilizing a beneficiary designation.

Question 14

Define Probate Process

Answer 14

The legal proceeding that serves to prove the validity of existing wills, supervise the orderly distribution of the decedent’s assets to the heirs, and protect creditors by ensuring that valid debts of the estate are paid.

Question 15

Define Situs

Answer 15

The place, generally referring to the state, where property is located.

Question 16

Define Surety Bond

Answer 16

A bond posted by the administrator or the executor of the estate to protect creditors, heirs, and legatees from losses created by the administrator or executor.

Question 17

Define Totten Trust

Answer 17

Not a trust, but rather a bank account with a beneficiary clause.

Question 18

Define Transfer-On-Death Account (TOD)

Answer 18

An investment account utilizing a beneficiary designation.

Question 19

Define Devisee

Answer 19

A person who inherits real property under the will.

Question 20

What are the possible ways assets may be transferred and retitled? 4

Answer 20

• Probate process
• Contract law
• State titling law
• State trust law.

Question 21

What are the advantages of transferring assets through the probate process?

Answer 21

1. Implements disposition objectives of testator
2. Provides for an orderly administration of assets
3. Provides clean title to heirs and legatees
4. Increases the chance that parties of interest have notice of proceedings and, therefore, a right to be hear.
5. Protects creditors by insuring that debts of the decedent are paid.

Question 22

When will the probate court not honor the wishes set forth by the decedent in the will?

Answer 22

In Instances of proven fraud or undue influence by a legatee or third party regarding the decedent or in cases where the decedent lacked mental capacity to execute a will.

Question 23

How does the probate process protect a decedent’s named heirs?

Answer 23

• Due to the probate processes orderly administration it prevents one legatee or heir from having priority over another of equal rank.
• Provides them with a clear title (free of creditor’s claims) by clearing liens.

Question 24

How does the probate process protect a decedent’s creditors?

Answer 24

It ensures that the debts of the estate are paid before distributions are made to heirs or legatees.

Question 25

What are the disadvantages of the probate process?

Answer 25

• Can be complex and excruciatingly slow - Delays
• Can result in substantial monetary costs - Costs
• The process is open to public scrutiny - Publicity

Question 26

What is the average cost to an estate of the probate process?

Answer 26

Between 5 and 10% of the estate’s value.

Question 27

What are ways other than probate that nontraditional couples have at their disposal to transfer assets without contest?

Answer 27

• Annual gifting

- Transfer devices such as transfers by contract, titling with survivorship features, and trust.

Question 28

What is the first step in the probate process?

Answer 28

Produce the will if one can be found. Any person can begin the probate process by presenting the will to the probate court.

Question 29

What is the second step the the probate process?

Answer 29

The interested parties must go to the probate court to open the Estate Administration or Succession Process.

Question 30

Generally, what is the most appropriate probate court?

Answer 30

The court where the person was domiciled at death.

Question 31

What information does the petitioner (generally the executor) need to supply the court to begin the probate process?

Answer 31

• Certified copy of the death certificate
• Last will (if available)
• List of names and addresses of the decedent’s heirs
• List of known creditors.

Question 32

If all the paperwork is in order that was supplied to the probate court to begin the process, what do they do?

Answer 32

• Accept the will
• Filed in the public records
• Court will officially open the probate process
• The court will then appoint a personal representative.

Question 33

If the will was not self proving, what extra steps have to be taken?

Answer 33

Witnesses must testify that the decedent did sign the will and was mentally competent. They will be needed at the initial hearing to validate the will.

Question 34

What is marshaling the assets?

Answer 34

When an executor or administrator identifies and takes control of the decedent’s assets.

Question 35

Which type of assets have to go through probate to be retitled?

Answer 35

Those held as

• Fee simple
• Tenancy in common
• Community property

Question 36

What is needed to collect life insurance proceeds?

Answer 36

The beneficiary has to provide a certified copy of the death certificate to the insurer.