Probate and estate administration

Question 1

Probate

Answer 1

1. judicial process by which the will is proven and judicially accepted as the true last testament of the deceased
2. place of administration is the country and state of domicile at time of death
   i. administration in the domicile is conclusive in other states for disposition of personal property
3. another will may be admitted to probate only within the later of:
   i. 120 days after an order admitting the first will into probate or determining decedent to be intestate
   ii. 60 days after proponent obtains knowledge of the will
   iii. but a bona fide purchaser from an heir or beneficiary is protected if letters of administration or testamentary letters are granted, even if there is a subsequent will admitted to probate

Question 2

Personal representative

Answer 2

1. executor: person who administers an estate who is named in valid will or codicil
2. administrator: person who administers a testate estate but is not named in the will
   i. priority to spouses/domestic partners and relatives
3. in CA, personal representative cannot be:
   i. under age of majority
   ii. incapable of executing duties of office
   iii. subject to removal from office for waste, wrongful neglect of the estate, etc.
   iv. not a US resident (does not apply to executors)
   v. a surviving partner of the decedent and an interested person who objects to the appointment (does not apply to executors)
4. powers and duties
   i. give notice to devisees, heirs, and claimants to the estate (including creditors)
   ii. discover and collect decedent’s assets, and file an inventory
   iii. manage the assets during the administration
   iv. pay expenses of administration, claims, and taxes
   v. distribute the property
   vi. serve in a fiduciary capacity, but is primarily a liquidator and needs court approval to borrow funds, operate a business, or sell property
5. entitled to compensation
   i. any compensation provided in the will is sole compensation, unless court says otherwise
   ii. if no will provision, representative gets statutory compensation based on value of estate
   iii. court may deny compensation (ex. fraud, dishonesty, bad faith, etc.)

Question 3

Creditor claims

Answer 3

1. creditors’ claims are barred unless filed within the later of:
   i. 120 days after personal representative letter is issued to the creditor
   ii. 60 days after the notice is mailed or delivered
2. priority of claims
   i. debts owed to the US or to California
   ii. administration expenses
   iii. obligations secured by a mortgage, deed of trust, or other lien
   iv. funeral expenses
   v. expenses of last illness
   vi. family allowance
   vii. wage claims
   viii. general debts, including unsecured judgements and unsecured debts
3. liens are not exonerated on specifically devised property unless the will so directs
   i. common law requires executors to pay off encumbrances before passing on the property
   ii. in CA, there is no automatic exoneration, so property is passed on encumbered
   a. a general direction to pay off debts is insufficient
   b. if the gift is exonerated anyways, other specific gifts do not abate

Question 4

Abatement

Answer 4

1. abatement: process of reducing testamentary gifts in cases where the assets are insufficient to pay all the claims against the estate and satisfy all bequests and devises
   i. almost always arises with omitted spouse/domestic partner or child
2. testator may set out order of abatement in the will

Question 5

Abatement - relatives

Answer 5

3. the order of abatement for omitted relatives
4. unless specified otherwise in will, estates abate in the following order:
   i. from property passing not by will or revocable inter vivos trust (intestate property)
   ii. from will and revocable inter vivos trust pro rata in proportion to value of gift received
   a. no distinction between specific, general, or demonstrative legacies
   b. court may exempt specific gifts if abating it would defeat testator’s obvious intent appearing from the language of the specific devise or the general will
   c. no favoring of relatives over non-relatives

Question 6

Abatement - general debts

Answer 6

5. order of abatement to pay off decedent’s general debts:
   i. intestate property
   ii. residual property
   iii. general gifts to non-relatives of testator
   iv. general gifts to testator’s relatives
   v. specific gifts to non-relatives of testator
   vi. specific gifts to relatives of testator
6. within each category, gifts abate pro rata
7. demonstrative legacies
   i. demonstrative legacies are treated as specific legacies, but only to the extent that the gift from which the demonstrative legacy was to be satisfied is in the estate
   ii. to the extent that the fund is insufficient, the demonstrative legacy is treated as a general legacy
   iii. ex. $500 from the sale of my bike (value $300): $300 as specific, $200 as general legacy