Estate Administration

Barbara S. Accetta handles all matters relating to the administration of a decedent’s estate, including probate court administration, and the administration of trusts. The firm provides services with respect to the preparation of federal and state estate tax returns, and is well experienced in post-mortem tax planning for the estates of decedents who did not do any estate planning and/or who may not have fully implemented the estate planning documents they might have in place.

What is involved in estate administration?

When a person dies, there are a great many issues that must be dealt with. Obviously, there is the need to make funeral arrangements, to arrange for organ donations, if applicable, and other “personal” matters. There are also a number of legal and tax issues that must also be dealt with. Barbara S. Accetta can provide guidance through these complicated, and often, very confusing issues.  The following is a brief summary of some of the matters that are dealt with as part of the administration of an estate.

1.    The Probate Process

The process of “probating” an estate refers to the filing of those forms as are required by the Probate Court to secure the appointment of the appropriate fiduciary, known as a Personal Representative (formerly known as Executor or Administrator).   Probating an estate is required whenever the decedent died owning assets in his individual name and/or owned certain assets without proper beneficiary designations forms in place. Those assets cannot be accessed or transferred without the appointment of the Personal Representative by the Probate Court.  Having a Last Will and Testament in place does not mean that probate can be avoided, but it can sometimes make the process a little easier.

The probate process does not apply to certain assets which may pass automatically and do not have to be “probated.” For example, assets that are jointly held will pass automatically to the surviving joint owner(s), if any.  Other assets can pass automatically by virtue of properly completed beneficiary designation forms, such as life insurance policies, annuities, and retirement assets (including, but not limited to, Individual Retirement Accounts, 401(k) plans, profit sharing or pension plans, etc.).   Assets held in trust can also “avoid” probate.

There are generally two types of probate administrations. The first is when the decedent had a valid Last Will and Testament in which case the decedent is deemed to have a “testate” estate. The second is when the decedent had no Will and an “intestate” administration must be filed. In the intestate situation the decedent’s assets are ultimately disposed of according to the Massachusetts statutory laws of “descent and distribution.”  Generally, this means that the assets will pass to the decedent’s nearest relatives as set forth by statute.

Under Massachusetts law, there is also available a voluntary probate administration for that may be used in either the testate or intestate situation. This voluntary process is only available, however, if the total value of the assets in the decedent’s individual name (exclusive of any automobile) is less than $25,000.  In this case, there is a simple petition that is completed and filed with the Probate Court. There is a one-time filing fee and the petition is generally “allowed” by the Probate Court almost immediately. A certified copy of that petition as allowed by the Court will then authorize the named Personal Representative (formerly Executor or Administrator) to dispose of the assets in the decedent’s name, e.g., to sell any automobile, close out small bank accounts, etc.  Nothing further is thereafter required to be filed with the Probate Court.

If the decedent owned assets (exclusive of the value of one car) which are greater than $25,000  in the decedent’s individual name, then a “regular” probate administration will be required.   If the decedent had a will, then the person or persons named in the will to be the Personal Representative (formerly known as “Executor”) of the estate file a petition to have the will allowed by the Court and for that named Personal Representative to be appointed. If the decedent had no will, then a petition is brought typically by a family member or other close relative, although it can be anyone who is “interested” in the estate, for appointment as the Personal Representative.

2.    Guardianship for Minor Children

If there are minor (generally under the age of 18) children who are left orphaned by the decedent’s death, a guardian  and conservator, if applicable, must be appointed for them by the Probate Court.  A Guardian has physical custody of the child, and a Conservator has authority to manage with assets of the child.   If the decedent left a will naming someone to serve as Guardian and Conservator, that person will generally be appointed by the Court.   However, naming a person as Guardian and/or Conservator in your will does not necessarily guarantee that this person will be named. Your will only nominates the person to serve as Guardian and/or Conservator; it is up to the Probate Court to confirm the appointment. While, in most cases, the person nominated will be appointed by the Court, interested parties do have the right to object to the nomination. In such case, the Court will hold a hearing and make a decision based upon all the facts and circumstances. Such contests over who should serve as Guardian and/or Conservator often occur where there has been a divorce and/or where other relatives believe the named Guardian and or Conservator is not fit to serve.

3.    Estate Tax Returns

Federal and/or state estate tax returns may be required if the total value of the decedent’s assets exceed the applicable filing thresholds. For decedent’s dying in 2015, if the total value of all the decedent’s assets is less than $5,430,000, no Federal estate tax return is required.  For Massachusetts purposes, the threshold is ONLY $1,000,000.
In determining the total value of the decedent’s assets, all of the decedent’s assets must be considered. These include assets the decedent owned individually, jointly, in revocable trusts, life insurance policies, retirement assets and any other type of asset which the decedent possessed some form of ownership or control over.

The estate tax returns are due within nine months after the date of the decedent’s death. If there is a surviving spouse, there may be no estate tax owed, because assets passing to the surviving spouse will typically qualify for the estate tax marital deduction.   Even in that case, however, an estate tax return must still be filed even though there may be no estate tax owed.

4.    Other Duties

In addition to the probate process and filing any estate tax returns, there may be other matters to be taken care of as well.  Final income tax returns may need to be filed. These may include filing returns for the prior year as well as the partial year covering January 1 through the date of the decedent’s death.  If there is a surviving spouse, he or she can generally file a joint tax return for the year in which the decedent died.   If the decedent had any type of trust in place, there may be a need to make sure the trust is administered properly and that any and all tax returns related to that trust are filed.

5.    Post Mortem Planning

Even though a person has died, there may still be estate planning opportunities available. These are referred to as “post mortem” or “after death” techniques. There may be situations where the decedent had no will, or the will did not properly address all the issues facing the decedent’s family, and/or where circumstances have changed such that it would be desirable to have a different disposition of the decedent’s assets than might occur as a result of intestacy or under the terms of a decedent’s will.

One common technique is to use disclaimers to alter how the decedent’s assets will pass. For example, a decedent may have left a will leaving his entire estate to his spouse.  At the time of death, the spouse is in poor health as well and it may be advisable to have the assets instead pass to the alternate beneficiaries, e.g., the children. The surviving spouse can disclaim or give up her rights as beneficiary under the will such that the assets will pass directly to the children.

Another example of post mortem estate planning involves decisions about estate taxation. Sometimes the decedent and his spouse may have had a well designed estate plan in place that is designed to minimize the overall estate taxes that would be due upon both deaths, i.e., taking advantage of the “optimum” marital deduction.  In some cases, even though the decedent’s estate plan would operate to eliminate any estate taxes at his death, there are times when it can actually be beneficial to pay taxes currently to reduce the taxes that will be due later, i.e., in the surviving spouse’s estate.  More often than not, the benefits of paying taxes currently to reduce the overall taxes that would be paid later are minimal, but there are always exceptions and it is advisable to review the surviving spouse’s situation to determine whether there is a potential to reduce the overall estate tax liability by paying taxes currently.

6.    Trust Administration

If the decedent has a trust in place, then any and all assets that had been transferred to that trust during the decedent’s lifetime and/or that are payable to the trust upon death must be administered. The terms of the trust will control how those assets are administered and reference should be made to the actual trust instrument to determine what must be done.

Generally, the trust instrument will have named a trustee and/or a successor trustee who manages and disposes of the trust assets. Much like the court appointed Personal Representative (formerly known as Executor or Administrator), the trustee is a fiduciary whose obligation it is to carry out the decedent’s wishes with respect to the disposition of his assets.

The trust will typically become a separate taxpayer for income tax purposes and fiduciary income tax returns will need to be filed.

Schedule an appointment

Barbara S. Accetta can help you with estate administration, including the issues only briefly touched upon here, as well as many other issues which may affect a decedent’s estate. Call the office and Barbara can work with you to minimize the burden of the estate administration of someone who has passed away.