Administration of Estates

Following a person’s death, someone has to wrap up his or her affairs.  Someone has to

1. determine what assets the person owned in his or her own name and gain control or possession of them, including real estate, tangible personal property, bank and securities accounts, whether located in the state where to person died or in other states or foreign countries;
   
   
2. determine what debts, taxes and other claims the person was liable for at the time of death, no matter where owed;
   
   
3. negotiate settlements or payments of all taxes and legally enforceable claims; and
   
   
4. distribute the “residue” – the balance – of the estate, if any, to the beneficiaries named in the Will, or, if the decedent had no will, to those the state statute specifies as being entitled to receive it.\

If the person executed a Will prior to death, the personal representative is called the “Executor.”  If the person did not execute a will, the personal representative is called the “Administrator.”

Authority of the Executor

If a person executed a Will prior to death, he or she would have been able to name an executor to manage his or her affairs and to seek whatever professional legal, accounting or investment help might be necessary to minimize liabilities, debts and taxes and to see that the individuals or charities named, received the most possible, at the least expense, and as soon as possible.

If a person names the spouse or other family member, that person may not have any idea what is required of an executor, or if the administrator is at a loss as to what to do, they should hire an attorney, CPA, and/or financial advisors to assist as needed.

Authority of the Administrator

If a person does not make a will, then an heir, or someone nominated by an heir, or a creditor, can qualify as administrator to manage his or her estate under court supervision, to satisfy the claims of creditors, the IRS, state and local tax agencies, and other claimants, and to distribute the remaining residue to the “heirs at law,” that is, those members of one’s family designated in the state statute as being entitled to a person’s estate, whether or not the deceased person would have wanted these individuals to receive anything from their estate. 

An heir may seek to qualify as administrator or may nominate a third party, such as an attorney, accountant, or trust company to qualify.

An Administrator does not have the power to sell real estate, but must ask the circuit court for permission. After settling all claims, the Administrator must distribute the remaining property to those classes of heirs named in the state statutes.  The share that each heir will receive depends upon his or her relationship to the descendant.

In other words, if you do not take the time to make a will, the state legislature has made one for you.