If you’re going to inherit from an estate, you should learn about beneficiary expectations so the estate administration can go forward as smoothly as possible.
Let’s start with a few timing matters…
Most creditors have six months from the decedent’s date of death to submit their claim for payment. The IRS, Medicaid, and the Executor have different deadlines. This six months runs regardless of whether there is an estate is open or not. Some executors like to wait the full six months before beginning the estate administration in probate court because then they know whether there are creditor claims. But if there is a home that will have to be sold, it might be best to begin the estate administration right away so that the expenses don’t continue to mount.
Once an case has begun in probate court, it is likely that the estate will be open for a minimum of six months. I would often say that it is wise to expect as long as twelve months. This is not necessarily because of the probate court. One of the executor’s responsibilities is to file the decedent’s final income tax returns. If someone dies in February, the information to prepare the returns might not be available until the next January. This is one of, but certainly not the only, reason that probate goes on for so long.
Appointing the Fiduciary
Let’s talk about who is actually the executor. When a person writes a will, the executor is nominated. Nobody actually is the executor until the probate court appoints them to that role. If there is a will, and the first person in that will named to be executor applies for the role, that person is likely to be appointed. Remember, it’s a nomination. The first person nominated doesn’t need to accept the role. If any or all of the nominated executors decline the role, the court is likely to appoint the next suitable person. If the someone applies to administer the estate who doesn’t live in state, they are most likely not going to be appointed.
If there is no will, the fiduciary is going to be called the administrator. There is an order of priority for people to serve in this role. Without a will, the decedent’s surviving spouse has priority to serve as administrator. This is true even if the surviving spouse is not the parent of any of the decedent’s children.
Waivers
One of the important beneficiary expectations is about waivers. A beneficiary is going to be asked to waive notice of probate of the will, waive notice of the hearing on the inventory, waive notice of a hearing on the account. It’s the beneficiary’s decision as to whether the beneficiary waives notice. The estate administration can proceed if a beneficiary does not sign waiver(s), but the estate may take longer to administer. Hearings are often scheduled at least one month from the date of the filing. If the fiduciary has signed waivers from everyone, there might not need to be a need for a hearing. If a beneficiary has questions about the legal significance of signing a waiver, the beneficiary should obtain their own legal advice before signing the waiver.
Bond
The Probate Court may require that the executor/administrator purchase a probate bond. This bond is an insurance policy that protects the beneficiaries and creditors of the estate. If the executor or administrator steals money or pays bills out of order, the family can be made whole by making a claim against the probate bond. It’s important to point out that having the bond doesn’t mean the executor doesn’t have to worry about properly doing their job. If someone makes a claim against that probate bond, the insurance company that issued the bond is going to turn around and sue that executor to recover what they had to pay out for the executor’s missteps.
This is not a comprehensive list of beneficiary expectations. What happens in each individual case depends on particular facts and circumstances. It’s important for the Fiduciary to communicate everything with the beneficiaries to keep the estate administration moving forward.
