Do You Know What to Do When Someone Dies? Probate Information You Should Know

5/12/2023

When a person dies, what happens next will depend on various factors.

If the deceased person did not engage in trust-based estate planning, which our clients do, then probate will likely be required. Probate is a formal legal process of proving that a will is valid (if the person had a will) and appointing someone (executor, now known as the “personal representative”) to carry out legal obligations of paying creditors, paying taxes and supervising the distribution of the deceased person’s property.

As discussed below paying taxes, paying creditors and distributing property can be done without involving the courts. Nevertheless, for people who do not engage in trust-based estate planning, probate will be required.

Probate Analysis

This analysis will help determine whether a probate case needs to be opened.

Probate Concepts

While probate rules can vary between D.C., Maryland and Virginia, below we examine some of the concepts relevant to probate anywhere.

Deadlines

Deadlines must be met. If the appointed personal representative fails to meet the deadlines, then the court may penalize the personal representative or even remove him or her as personal representative.

Supervised or Unsupervised Probate

The number of deadlines will depend on whether the court will supervise the proceeding. While most proceedings in D.C. are unsupervised, proceedings in Maryland and Virginia are supervised, which means the personal representative must file inventories and regular accountings

Interested Persons

The law dictates who is entitled to know about a petition for probate. The personal representative must identify for the court these “interested persons,” who must be informed of the petition for probate and then those interested persons, who must be informed of any filings with the court such as an inventory or accountings.

If the person has a will, these interested persons will initially include the people named in the will (legatees) and people who otherwise would inherit if there were no will (heirs at law). This latter group, heirs at law, must be given the opportunity to contest the will. Once the will is admitted to probate then these heirs at law are no longer considered “interested persons.”

When dealing with interested persons, even if there is bad blood, the personal representative has a legal duty to keep an interested person informed and to provide them with the information they are legally entitled to.

Collecting and Securing the Property

The personal representative must locate and secure the deceased person’s money and property and create an inventory of all items.

Tax IDs

The personal representative will likely need to obtain from the Internal Revenue Service a tax identification number for the estate and open an estate checking account for depositing estate funds and paying creditors and taxes.

Notifying Creditors

The personal representative must notify known creditors and attempt to find unknown creditors. Notice to unknown creditors is accomplished through publication.

Generally, at the direction of the probate court, the personal representative must mail the notice to known creditors and pay for (or otherwise cause) a notice to creditors to be published in specific publications for the requisite period of time.

This notice allows creditors, both known and unknown, to make claims against the estate for any debt owed by the deceased person. The personal representative must then determine the validity and priority of all creditor claims received and pay those claims as appropriate.

Claim Period

If the personal representative follows the correct steps regarding the notice to creditors, then any debts not brought during the claim period may be extinguished once the claim period ends. With respect to untimely claims, the estate will be relieved of any obligation to pay such claims. Cutting off these claims creates legal certainty, so that the personal representative can ultimately close the estate and make the distributions of the deceased person’s property without worrying about future claims.

Accountings

The personal representatives must maintain accounting records as proof of monies coming into and going out of the estate. Depending on the circumstances, the accounting records may need to be filed with the court, and interested parties may need to sign releases at certain intervals.

Filing and Paying Taxes

A personal representative must file the deceased person’s final tax returns (1040) for the period up to the date of death. The 1040 and equivalent state returns are due on the same day as if the deceased person were filing.

The personal representative will then be required to file a fiduciary return (1041) for the remaining period until the estate is closed.

If the deceased person was even moderately wealthy, the personal representative may have to file an estate tax return (706) and the estate returns for D.C. or Maryland (Virginia has no estate tax). These state returns flow from the information provided in the federal estate tax return.

We Are Here to Help Avoid Probate

Most of what needs to be done when someone dies can be done outside of court. Therefore, probate is an unnecessary burden which should be avoided. By focusing on trust-based estate planning, we help our clients avoid probate and stay out of court. If this sounds good to you then we can work with you to create an estate plan to take care of you and your loved ones with without going to court. If you would like to learn more about using a trust-based estate plan and what is involved, please give us a call.