Probate Proceedings & Related Issues

Question 1

What is the effect of a durable healthcare power of attorney?

Answer 1

• A durable health-care POA empowers a designated agent to make all health-care decisions for the principal in the event of the principal’s incapacity.
• The power is not limited to a particular illness or for a particular time period, unless the durable POA specifies otherwise.

Question 2

How does an agent designated by a durable power of attorney make decisions?

Answer 2

• In the absence of specific instructions, a designated agent shall make decisions for the principal “in accordance with the agent’s determination of the principal’s best interest . . . [considering] the principal’s personal values to the extent known to the agent.”

Question 3

Is a friend/family member of an incapacitated person required to consult other family members before making healthcare decisions for the person?

Answer 3

• If he is an agent designated by a durable healthcare power of attorney, no, the person need not consult family members who are not designated agents of the patient.
• If no durable healthcare POA, then a majority of immediate family members must agree to the healthcare decisions.

Question 4

Can an agent designated in a durable power of attorney be subjected to civil or criminal liability if his decisions result in harm to the principal?

Answer 4

• No. State laws governing durable healthcare POAs typically insulate the agent from criminal and civil liability as long as the agent has acted in GOOD FAITH. (Uniform Healthcare Decisions Act)

Question 5

What is the difference between a “durable” and “limited” power of attorney?

Answer 5

Durable = remains effective if the principal is incapacitated or disabled

Question 6

What powers are excluded from a power of attorney unless specified?

Answer 6

Powers to:

• make/amend life insurance contact
• make a will
• make donative transfers
• conduct trust activities
• disclaim property

Question 7

What categories of property are not subject to formal probate proceedings?

Answer 7

• Insurance policies
• Pension plans
• Joint tenancy estates
• Joint banking potentially (to extent of the terms)
• Pay-on death accounts (have a named beneficiary)
• Inter vivos trust res
• Pour-over wills (all or specified assets pour into a trust at death, trust is created concurrently)
• Community property agreements

Question 8

In states recognizing community property agreements, what provisions are required for them to be valid?

Answer 8

(1) everything we own is community property
(2) everything we acquire will be community property
(3) when I die, all community property goes to my surviving spouse

Question 9

What is the fiduciary duty of the personal representative of the estate?

Answer 9

to exercise reasonable care like a prudent person in investment decisions, as if dealing with her own property

Question 10

What remedy is available if a will has been destroyed or cannot be located?

Answer 10

Most states allow testimony evidence of the will’s contents reduced to writing, or a copy of a written will, if there is clear, cogent, and convincing evidence that there was a will and it was not revoked.

Question 11

What is the notice requirement when opening probate proceedings?

Answer 11

The personal representative must publish a notice to interested persons for three consecutive weeks in a local newspaper.

The notice must:

• identify the decedent, the probate court, the personal representative’s contact information
• and must state that any claims against the estate must be presented within four or six months of the first publication

Question 12

What is the significance of claims over $1,000 against the estate made in response to notice?

Answer 12

Claims over $1,000 must be allowed or rejected within 30 days; after that the claimant may notify the personal representative that he will petition the court for the claim to be allowed.

Claims less than $1,000 are deemed allowed if not rejected within 6 months.

Question 13

When does the personal representative incur personal liability on the decedent’s debts?

Answer 13

(1) If the PR fails to pay a known creditor, the PR is personally liable, unless the non-payment was “without fault”
(2) If a PR pays an estate debt or makes a distribution without retaining sufficient assets to pay estate taxes

Question 14

What is the priority of asset distribution for an insolvent estate?

Answer 14

1. Costs of administration
2. Funeral and last illness expenses
3. Family maintenance, child support
4. Taxes
5. Secured parties
6. Liens and judgments
7. Unsecured debts
8. Distribution to beneficiaries:
   a. specific asset gifts
   b. cash or demonstrative legacies
   c. residuary
   d. intestate succession
   e. escheatment