First Steps For Personal Representatives in DC Probate Cases

When someone is appointed as personal representative, the court issues a Letter of Administration. The Letter of Administration, as a DC Probate lawyer can explain, is the personal representative’s official authority to act on behalf of the estate.  A new tax identification number is also obtained for the estate. With the new tax identification number and the Letter of Administration, the personal representative can begin to marshal the assets of the estate and establish an estate checking account. Marshaling the assets may include re-titling stocks into the name of the estate, changing bank accounts into the name of the estate, and generally, collecting the assets to be held in the estate account. The personal representative will also begin to obtain date of death values for all of the estate assets, including having real and tangible personal property appraised.

The personal representative also reviews the debts of the estate to determine if they are legally enforceable, and if there are sufficient estate assets to pay all of the debts and administrative expenses. Finally, when all of the assets are marshaled, debts and expenses are paid, and the necessary income and estate tax returns are filed, the personal representative can begin to make distribution according to the terms of the law or the terms of the last will and testament, whichever is applicable.

Marshalling the Assets

Usually it means that the personal representative is asserting control of, or collecting the assets in his or her fiduciary capacity to manage them as part of the estate. The specific asset dictates how it is marshaled. For example, stock will usually be re-titled into the name of the estate.

Marshaling the assets depends on the nature of the assets in the decedent’s estate. If an estate is large or has complex assets; it may take a longer to contact all the financial institutions, or to have businesses valued. The actual process for marshaling the assets depends on the nature of the case and the nature of the assets involved in an estate.

Marshalling the assets of the estate is easier when the personal representative or a third party is familiar with the decedent’s assets. Due to the age of online banking and investing, it can sometimes be difficult to determine what financial institutions to contact to marshal all of the decedent’s assets.

Record-Keeping Requirements

Good record keeping makes the administration process easier and more efficient. Good record keeping includes keeping track of all the assets collected, their value as of the date they were collected, all of the income earned, returns of principle, any refunds, and all of the expenses or debts paid from estate funds. Tracking these activities makes the required accountings easier and more cost efficient to prepare.

Dealing with Poor Record Keeping By Decedent

When little or no paper record keeping is completed by the decedent, the estate administration can be challenging. After the personal representative is appointed; he or she can begin to collect the mail of decedent or search through the decedent’s personal files. Often, these are the first steps in the process of determining what the estate assets are and where they are located.

In the age of electronic banking and investing, paper statements often are no longer issued by financial institutions. It can be challenging to track down a decedent’s assets where the only documentation of ownership is electronic. The personal representative and the attorney will have to spend time tracking down the assets and searching for unclaimed property to determine if there are any additional assets that can be found. In some cases, the personal representative will have to contact a variety of financial institutions to determine if they hold any additional estate assets.

Locating and Identifying the Property and Assets

It depends on the nature of the property and the nature of the asset. We begin with the known assets and contact the known financial institutions. On a case to case basis, we may look for additional assets or follow any leads found in the decedent’s paperwork, their files, or leads that come in by mail.

Taking Possession of the Property

The nature of the asset determines how it is marshaled. Bank accounts, stock accounts, and other financial accounts may be marshaled by changing the name of the account to the name of the estate and using the estate tax identification number.

Real estate is generally held in the name of the decedent until it is either sold or is it distributed to the proper beneficiary. With assets such as cars, artwork, or tangible personal property, it depends on the case to determine the best way to marshal assets to accommodate the dynamics of the family and the nature of the assets.

Unclaimed Property

Unclaimed property is property that is turned over to the state where the asset is located. Unclaimed property is commonly refunds from utility companies, or bank accounts that have not been active for several years.

There are many places and websites that list unclaimed property. A personal representative may do a search to locate any unclaimed property while marshaling the assets of the estate. If found, the personal representative applies to the state where the funds are held to collect the asset. It can sometimes be difficult to have the documentation necessary to prove that the individual who is named on the unclaimed property is the same individual who is deceased.

Common Myths About Marshalling Assets

One common misconception is that a personal representative is collecting money for his or her own use. A personal representative may not commingle the assets of the estate with his or her personal funds.

Important Things Everyone Should Know

The Personal Representative’s use of good record keeping is the most important aspect of the process of marshaling the assets. The personal representative may wish to document every communication with a financial institution, noting the correct person or group to contact, the best number to call, and the proper address to use when mailing the required paperwork to marshal the asset.

The process of marshaling the assets also requires good communication with the attorney who is able to assist the personal representative throughout the process. Early in the marshaling process, the personal representative should alert the attorney to any issues with titling, or with the collection of the assets.

The personal representative should keep a list of all of the assets marshalled noting the name of the financial institution, the account number, the amount of the asset collected on the date of death and the date of collection, and the date the asset was deposited into the estate account.

Obtaining Assets and Information from Financial Institutions

Marshaling assets and getting asset information from bank, brokerage, and financial institutions is very difficult. Each institution has a different set of rules, a different set of guidelines, and different paperwork required to be completed to receive information about the asset. Sometimes, the process changes from estate to estate or differs depending on the type of asset being held, or the location where the account was originally opened.

Many bank and brokerage agents do not necessarily understand the nature of probate, or the documentation that the personal representative is required to provide. The job of the personal representative can be time consuming and paperwork intensive.

Required Reports for Personal Representatives in DC

The type of estate administration proceedings initiated determines the requirement for additional reporting on behalf of the personal representative. For most estate proceedings, a personal representative is required to prepare an inventory of the assets reflecting the date of death values. A personal representative is often also required to prepare an accounting of all of the income, gains, losses, refunds, returns of principle, distributions or administration expenses, or debts of the estate assets.

Whether the inventory and the accounting need to be filed with the DC Superior Court depends on the type of administration sought. For example, in an unsupervised estate administration, the personal representative does not file the Inventory with the Superior Court for the District of Columbia, Probate Division, rather he or she circulates the Inventory to the beneficiaries or heirs of the estate.