When a loved one passes away, his or her estate often goes through a court process called probate or estate administration where the assets of the deceased are managed and distributed. The length of time needed to complete the probate of an estate depends on the size and complexity of the estate and the local rules and schedule of the probate court.
Every probate estate is unique, but most involve the following steps:
- Filing of a petition with the proper probate court.
- Notice to heirs and devisees.
- Petition to appoint a Personal Representative (formerly known as an Executor in the case of a Will or Administrator in the case of intestacy).
- Inventory and appraisal of estate assets by the Personal Representative.
- Payment of estate debt to rightful creditors.
- Sale of estate assets, if necessary.
- Payment of estate taxes, if applicable.
- Final distribution of assets to devisees or heirs.
FREQUENTLY ASKED QUESTIONS
What happens if someone objects to the Will?
An objection to a Will, also known as a “Will contest” is a not uncommon occurrence during the probate proceedings and can be costly to litigate.
In order to contest a Will, one has to have legal “standing” to raise objections. This usually occurs when, for example children are to receive disproportionate shares under the Will, or when distribution schemes change from a prior Will to a later Will. In addition to disputes over the tangible distributions, Will contests can be a quarrel over the person designated to serve as Personal Representative.
Does probate administer all property of the deceased?
Probate is primarily a process through which title is transferred from the name of the deceased to the names of the devisees or heirs.
Certain types of assets are what is called “non-probate assets” do not go through probate. These include:
- Property in which you own title as “joint tenants with right of survivorship”. Such property passes to the co-owners by operation of law and do not go through probate.
- Retirement accounts such as IRA and 401(k) accounts where there are designated beneficiaries.
- Life insurance policies with beneficiary designations.
- Bank accounts with “pay on death” (POD) designations or “in trust for” designations.
- Property owned by a living trust. Legal title to such property passes to successor trustees without having to go through probate.
Do I get paid for serving as a Personal Representative?
Personal Representatives are reimbursed for all legitimate out-of-pocket expenses incurred in the process of management and distribution of the deceased estate. In addition, you are entitled to reasonable fees, based on a number of factors, unless the decedent's will says otherwise. The Maine Probate Code provides for reasonable compensation at http://www.mainelegislature.org/legis/statutes/18-A/title18-Asec3-719.html. Factors to be considered in determining reasonable fees are set out by law at http://www.mainelegislature.org/legis/statutes/18-A/title18-Asec3-721.html. The Personal Representative has to fulfill his or her fiduciary duties on behalf of the estate with the highest degree of integrity and can be held liable for mismanagement of estate assets in his or her care. It is advised that the Personal Representative engage an attorney and an accountant to advise and assist him or her with his or her duties.
How much does probate cost? How long does it take?
The cost and duration of probate can vary substantially depending on a number of factors such as the value and complexity of the estate, the existence of a Will and the location of real property owned by the estate. Will contests or disputes with alleged creditors over the debts of the estate can also add significant cost and delay. Common expenses of an estate include Personal Representatives fees, attorneys fees, accounting fees, court fees, appraisal costs, and surety bonds. Most estates are settled though probate in about 9 to 18 months, assuming there is no litigation involved.
Some estates are small enough and their circumstances are such that creditor claims do not need to be satisfied, and that the estate can be distributed promptly without the Probate Court even providing notice to creditors. However, except in such situations, generally the Personal Representative should wait until the 9-month-after-death creditor claims filing period expires before fully distributing and terminating the estate, unless he or she is very certain that all debts of the decedent and other claims have been paid. A MaineCare estate recovery claim is not limited to being filed within the normal 9 months, so it is essential to examine whether a MaineCare estate recovery claim may exist before distributing the decedent's estate assets.
In Maine, Probate Court fees for document filing and other costs are set by statute. These costs are posted on the York County Probate Court website at http://www.yorkcountyme.gov/contact/PROBATE/content%5CFees-2012.pdf.
One can also see most of the documents filed in the docket of probate cases in Maine by using the search function at https://www.maineprobate.net/search.html. Some documents are confidential or protected for privacy so are not available online.
The Maine Probate Code is available online at http://www.mainelegislature.org/legis/statutes/18-A/title18-Ach0sec0.html.
How much does trust settlement cost? How long does it take?
The cost and timing of trust settlement may be shorter than the cost and timing of probate estate administration, although this is not necessarily so. Many of the steps involved in trust settlement are very similar to those involved in estate administration. In fact, when a decedent dies leaving a will and a revocable living trust, it is often prudent to treat the revocable living trust as part of the estate for income tax purposes. The costs of trust settlement often do not include fees to the probate court, but they do include attorney and accountant time, preparation and recording of deeds of the trustee(s) to the beneficiaries or to subsequent trusts, and many of the other costs that are very similar to costs arising in the probate process.
All Maine trusts - even those that have existed since before Maine became a state in 1820 - are governed by the Maine Uniform Trust Code (UTC). This body of law became effective in 2005 but is retroactive to cover all Maine trusts. The Maine UTC covers many topics and in many cases fills in the law on aspects of trust administration that were not addressed in the trust agreement or declaration document. The Maine UTC may be accessed at http://www.mainelegislature.org/legis/statutes/18-B/title18-Bch0sec0.html.
Certificate of Discharge of Maine Estate Tax Lien
At the moment when an owner of an interest in Maine real estate dies, an automatic ("inchoate") Maine estate tax lien attaches to his or her interest. Other than when one of three very specific statutory exceptions applies (if the decedent's trustee, Personal Representative, or surviving joint tenant sells the decedent's interest in the property for value, http://www.mainelegislature.org/legis/statutes/36/title36sec4072.html), in order for any successor owner to have clear title to the interest of the decedent, a Certificate of Discharge of Maine Estate Tax Lien must be obtained from Maine Revenue Services and recorded in the County Registry of Deeds where the real estate is located. The Certificate of Discharge relates to one or more particular properties in a particular county, so a separate Certificate should be recorded in the Registry of Deeds of each county where the decedent owned real estate. For discussion of the rules and requirements to obtain a Certificate of Discharge, there is very helpful guidance on the Maine Revenue Services website for decedents through 2012: http://www.maine.gov/revenue/incomeestate/guidance/estate_guidance_pre2013.htm. For dedecents in 2013 or thereafter, see: http://www.maine.gov/revenue/incomeestate/guidance/estate_guidance_2013.htm.
In 2013, the Maine Legislature amended the Maine Estate Tax Lien statutes so now a Maine Estate Tax Lien expires 10 years after the date of death of the owner of an interest in property, and the Lien does not attach at all to real estate that passes by joint tenancy with right of survivorship to the surviving spouse. The statutes are specific that the spouses must have been married at the time of the first joint tenant spouse's death.
Please note that the Personal Representative of the decedent's estate is responsible for filing any Maine and federal estate tax returns on behalf of the decedent's estate. If there is no Personal Representative, the persons receiving the decedent's assets are responsible to file the returns. The successor owner or even a subsequent owner who received the property by gift, or bought it without a title search, could end up responsible to resolve the title problem caused by there not being a Certificate of Discharge of Estate Tax Lien recorded in the Registry of Deeds. This can be true even if he or she had no family or other relationship to the decedent -- except having become a subsequent owner of the decedent's former property. (Buyer beware, and gift recipient beware too!)
When the attorneys and staff at Maine Center for Elder Law, LLC assist Personal Representatives or devisees of estates, trustees or beneficiaries of trusts, surviving joint tenants, or others who have received Maine real estate that was owned at the time of death, or in which the decedent held any interest (outright, in trust or in a pass-through entity such as an LLC) such as a life estate, life tenancy or power of appointment that caused taxable estate inclusion at death, a key question is whether a Maine Revenue Services Certificate of Discharge of Estate Tax Lien has been obtained and recorded in the Registry of Deeds of the County where the real estate is located, or whether one of the three narrow exceptions to the requirement applies. If not, it is very important to proceed to do what needs to be done in a timely manner. This is to remove this cloud from the title of the property, which will otherwise make the property nonmerchantable and even unable to be financed or refinanced. If the decedent died several years or decades ago, it can be very difficult and costly to find and document the value of his or her estate (that is, gross federal taxable estate, not just the Maine property) at the time of death. Waiting is not a good idea. The title problem will not go away, unless one of the three narrow exceptions applies, particularly if the surviving joint tenant eventually sells the property.