PROBATE PROCESS

If you are named in a Will as the Executor/Personal Representative of an estate, or have been appointed by Probate Court as Administrator of an estate for someone who has passed without a Will, you have become a “Fiduciary.” A Fiduciary is any person appointed by the Court to preserve and protect assets, complete payments of debts owed by the decedent, file a final income tax return for the decent (and possible a tax return for the estate) and to distribute the assets of the estate to those persons legally entitled to the items.

Be aware that this process will take some time and the path to closing an Estate can be a long and windy road. For each step, the Fiduciary must serve copies of the legal documents upon the beneficiaries and obtain their written consent.

Legal guidance is highly suggested, as the fiduciary will likely have many questions and concerns and the Court may not be willing to assist.

Having consulted with an attorney, the next step is to file a Petition to Open the Decedent’s Estate with the court. In addition, the Fiduciary must file the Inventory, or list all assets the decedent had at the time of death.

The Fiduciary is responsible to safeguard assets until distribution. The Fiduciary will be locating items and other assets named in the Will and will be responsible to keep track of items for later distribution to the beneficiaries who have been named to receive such assets. To ensure the proper protection of assets, it may be essential for the Estate to invest in an alarm system or even change the locks on the decedent’s home. Not only will an Executor be dealing with tangible assets, but it is important to preserve financial records.

It is important to note that a surviving spouse has rights that take priority over the rights of other family members and non-family members who have been listed in the most recent Will.

The Fiduciary files a final income tax return for the decedent and obtain a clearance from the State of Vermont. An estate income tax return or an estate tax return may also be necessary. It is very important to consult with an accountant once the Inventory of the estate has been confirmed.

After having opened the Estate, it is essential to close all accounts of all types under the decedent’s name and transfer the funds to an estate account. Before maintaining separate accounts for the Estate, the Fiduciary will need to obtain a Tax Identification Number (EIN) for the Estate. Estate funds must be kept separate from your own personal funds and must not be mixed with funds belonging to anyone else. It is essential that you keep exact records of all assets coming into and out of the Estate.

The Fiduciary must then determine all of the debts. This task will be challenging and will most often include getting in contact with creditors to deal with claims of debts. It is important that no bills are paid until it is confirmed that there are enough assets to pay them.

If there is real estate, the Fiduciary must ask the Court for permission to sell or convey the real estate and report back to the Court when the sale has taken place. If the debts exceed the assets, the Court must determine which claims should be paid. Please note that it is possible that not enough money will be in the Estate for beneficiaries to receive their inheritance.

A final accounting is filed with the Court along with the consent of the beneficiaries. This Accounting is a detailed report that must account for all of the assets and debts relating to this Probate Case.

In closing, the Court will issue a Decree of Distribution, the Fiduciary will deliver the assets to the beneficiaries and the fiduciary will have to file a Fiduciary’s Closing Report with signed receipts from the beneficiaries.

At that point, the Court will issue an Order to close the Estate.