By Dan Barney

Estate Planning & the Law

In past articles, we have explored various common misunderstandings relative to estate planning. Each of these myths has been repeatedly expressed by clients; thus, they are very typical of confusion that exists in the general public.

A constant source of confusion relates to wills.

The misunderstanding involves the scope of power of persons named in the will as personal representative (executors) over the decedent’s property.

A. A personal representative cannot distribute a decedent’s assets to themselves or to other beneficiaries until authorized by the court.

It is surprising how widespread is the belief that a will provides immediate authorization to distribute assets of an estate. The related erroneous conclusion is that if a person dies with a will, then probate is not required.

In fact, if a person has a will, that will and the distributions named therein, can only be made valid via order from the probate court. There are ways to avoid the probate process but just having a will does not accomplish that goal.

There are continuing misconceptions regarding what powers are held by a personal representative and when he can exercise them.

B. It is not true that once a person receives appointment as the personal representative from the probate court, that he can start distributing assets from the decedent’s estate.

This is just not the case. In fact, to do so would defeat the purpose of probate – that is oversight and control by the court. Probate fulfills the following purposes:

A. At death, the assets of the deceased are subject to control and monitoring by the court.

B. The court then begins the task of determining what the decedent’s wishes were for distribution and who was selected to administer the estate.

C. The court’s role is also to review the scope of the estate, define all assets in the estate and determine all debts of the estate.

D. Probate requires therefore a “Notice to Creditors” to enable preparation of a complete list of debts of the estate and to give each creditor the opportunity to be heard.

E. The court monitors any transfers, sales of assets or payments as the probate progresses. The personal representative is authorized to receive money and manage the assets of the estate, but he is not authorized to withdraw or transfer assets from the estate.

F. At the final hearing and after notice to interested parties, the court determines who should get distributions and what share goes to each person.

The entire probate process is structured to provide a court monitored handling of a decedent’s estate to insure that the wishes of that decedent are followed. This is also intended to prevent unauthorized distributions or “raids” on a decedent’s assets by improper persons.

Conclusion. Thus, it would evade the real purpose of probate if a personal representative could prematurely begin distributions without probate or prior to approval or direction by the Court.

Letters Testamentary authorize a personal representative to act for the estate, but they do not authorize distributions prior to court approval or final order.

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