Recent state government legislation has simplified the way probate is carried out in Massachusetts. Before we get into the details of how the Massachusetts Uniform Probate Code works, the concept of probate itself will be explained.
What is probate?
When someone dies, they may have assets, such as bank deposits, property, shares or other valuable items such as vehicles, jewelry, artworks etc. They may also have debts or taxes to pay, or have neither assets nor debts. They may have made a will or at least some indication how they want their assets distributed, or they may have died intestate, i.e. there was no will.
Before any assets are distributed to beneficiaries as stated in the deceased’s will or according to the state’s intestacy rules, a period of time is left aside for any potential beneficiaries to state their claim to some or all of the assets or contest the will. It also gives time for creditors to declare debts owed to them.
The period of probate in Massachusetts is normally set at one year from the death of the testator (the person who has made the will), but it could take longer if there are disagreements between the beneficiaries or arguments about what creditors are actually owed. Probate is normally advertised in a newspaper.
Sorting out the assets and debts of someone who has died, organizing probate and eventually distributing any remaining assets minus debts and taxes to beneficiaries is the job of a person who has been appointed to do the job. This person is called the personal representative or executor.
The role of the personal representative
In many cases, but not all, the personal representative is appointed by the testator before death and is named in the will. The personal representative may be a trusted relative, a friend, colleague or a lawyer. The job is not for the fainthearted as it can prove to be quite a lot of work beyond that person’s normal daily workload. Unless there were arrangements made in advance with a lawyer, the personal representative is not expected to profit from their role, but can claim necessary expenses or even a small fee if related to the job of looking after the distribution of the will.
In some cases, usually when the person dies intestate, there may not be a personal representative already appointed. It is then up to the court in the county where the person died to find and appoint a personal representative.
The Massachusetts Uniform Probate Code
The Uniform Probate Code (UPC) has been adopted by eighteen states, including Massachusetts. It aims to standardize probate rules across different states and in many cases make the whole process easier and cheaper. It was first created back in 1969 by the National Conference of Commissioners on Uniform State Laws (NCCUSL) but was updated in 1990. The Code sets out the procedures for probate through the provisions in seven main articles. Not all states have signed up to the Code and it is up to individual states to modify aspects of the Code
One of the ways that makes probate easier is that the UPC divides probate procedure into two main methods: informal and more formal.
Probate procedures may not actually be necessary if:
- the assets were jointly owned. The remaining assets then automatically go to the joint owners, e.g. the spouse if assets were only owned by the deceased and his/her spouse.
- there was a life insurance policy in a named beneficiary;
- the assets were in a revocable living trust;
- assets were set aside outside a will for a named beneficiary, e.g. in a retirement account.
The simpler, more informal, method is reserved for situations in which the deceased has left less than $25,000 in assets. The personal representative must still seek authorization from the court, but is then more or less left to deal with the estate alone. Technically, a magistrate is nominally in charge of supervising the personal representative. For the personal representative, this still means sorting out what the assets and debts are, who the beneficiaries are, if named in a will, or decided by the state intestacy rules, paying taxes and debts and then distributing the remaining assets to the beneficiaries. Once this has been completed, the personal representative informs the court through a sworn statement to say that all of the above has been done. The estate is then closed.
If there are any complications, or the assets are substantial, then a more formal method is used. A judge is then in overall charge of the probate proceedings. A personal representative still does all the things mentioned above, but must report all actions to the judge. All other persons of interest in the will, such as creditors, must also be kept informed. Before the personal representative starts sorting out the deceased’s assets and debts, a petition to the court is made for authorization to be appointed to the role. When the court appoints the personal representative officially, it issues what are called “Letters” which act like a certificate giving the representative the authority to pay taxes and debts and distribute assets.
In some cases, the deceased may have assets in another state apart from Massachusetts. If this is the case, then the personal representative may have to go through an additional probate in that state.
The personal representative will normally open a checking account to handle the money that is involved in dealing with the estate and to pay any expenses necessary. State and federal income tax returns will have to be filed and there may be an additional estate income tax return to be filed as well if the estate is worth a lot of money (around $20 million). Estates worth more than $1 million must also pay a state tax.
Beneficiaries will receive their portion of the assets once all debts and taxes have been paid. The estate can then be formally closed.
Should you have any questions, contact the Law Offices of Richard Mucci for a free legal consultation.