Real Life | Many steps required in administering an estate

Nice going! You, the family, and Loved One’s other estate fiduciaries are well into discovery and assembly. Concurrently, ready or not, the estate’s personal representative or administrator, and Loved One’s trustees — or the incompetent’s guardian, conservator, agents and attorneys-in-fact — must begin the estate’s administration.

“Whoa, Gary, what are you dragging me into?” Navigating the administration of a deceased or declared-incompetent person’s estate, that’s what.

No more estate planning can be done, no matter how flawed the plan is. You have to go with what’s there. The state and federal governments, and of course the heirs, demand action. The unforgiving mandatory pattern of tasks must be accomplished, in a specific sequence, and on a no-excuses timetable. Sometimes multiple state or foreign governments are involved, too.

Again, mercifully, not all the possible tasks are necessary in every case.

Here’s the anatomy — what it all looks like, but not necessarily in prescribed or in logical sequence, which, of course, depends on the dynamics of each individual case and by the jurisdiction’s laws and rules of procedure:

Most jurisdictions offer abbreviated “small-estate” processes for simple estates having few assets, and “memorandum filings” for estates that have almost nothing. Planners strongly advise their clients to structure the ownership of assets in order to avoid “full probate” because probate requires costly inventorying of everything and bureaucratic processing, and thus is to be assiduously avoided in favor of “simple (small estate or memorandum estate filing) probate.” Hooray for inter-vivos (during life) trusts and gifts!

Property sited in other jurisdictions might trigger some form of probate there, too.

Notifications to businesses, institutions, agencies, creditors, debtors, sources of entitlements.

Filing for, and collection of, payments receivable from institutions, benefit plans, entitlements.

Collection of accounts receivable from personal loans, business or professional agreements, and business transactions.

Pursuing unresolved health, disability and property insurance claims.

Pursuit until completion of pending legal, judicial, litigation actions and judgment decrees.

Claiming the proceeds of life insurance and annuities not contractually payable to named beneficiaries.

Required disclosure about estate management activities to parties of interest to the estate, such as the legatees and the heirs who are entitled to assets by law in intestate (no valid will) estates.

Verification and payment of debts, in the legally prescribed order of priority or proportion in case of insolvency. Some creditors enjoy legal priority status over others when the estate can’t pay all creditors in full.

Pursuit of any claims against others, for losses, negligence, damages and the like.

Dealing with the client’s trusts and business entities, most of which aren’t part of the probate estate, but are inseparably intertwined with it.

Distributions to specific legatees named in the documents to receive specified assets before residual legatees have any rights, after costs, taxes and creditors’ claims are covered.

Distributions of the remaining net assets to the residual (last in line after everyone else) legatees, heirs and intestate distributees. This usually is the last item before closing, except in the fortunate circumstances where there are plenty of available assets to more than cover all costs, and it’s clearly safe to make interim partial distributions. Any unwanted, rejected or leftover items can be trashed, donated (with tax benefits) or sold via “garage-sale” liquidators or used-merchandise dealers and consignment shops.

Yes, admittedly all of this is stressful and under pressure at an emotionally charged time. Here, “liquidators,” small local firms who take care of the household and its contents, can be a welcome service. For fee or commission, and working with your fiduciaries and with the benefit of your estate operators’ manual, they can do vexsome functions, such as selling or distributing the assets, and repairing and preparing the house for sale. Your realtor and estate lawyer know who they are and the unethical ones to avoid.

Still with me? Nice going! Next time: How you, too, can understand what the documents, lawyer and judge are saying. Meanwhile, let’s hear your ideas.

This story was originally published March 7, 2015 at 12:00 AM with the headline "Real Life | Many steps required in administering an estate."