How to Administer an Estate: A Guide for the Personal Representative
May 5th, 2022
A personal representative (aka executor) administers the estate of a deceased person. This blog serves as a general guide when probate is needed, but some circumstances will require additional steps. We encourage you to reach out to an attorney for assistance.
Step One: File Paperwork with Court
Did the deceased have a Last Will and Testament? If so, the person named in the Will as personal representative files the following documents with the Probate Court:
- Application for Probate of Will
- Acceptance of Appointment as Personal Representative
- Certificate of Value
- Original Will
- Original death certificate
If there is no Will, a family member may file this paperwork. Spouses and domestic partners have priority.
Once the Probate Court receives the required documentation, the court issues Letters of Authority authorizing the personal representative to act. Unless there is a question regarding the Will or another problem arises, you will not go to court for a hearing.
Step Two: Send Notice
As personal representative you must provide notice of your appointment to individuals named in the Will and certain family members of the deceased. The court has forms to use for this purpose. The court will arrange for publication in the local newspaper of the notice to reach unknown creditors. Creditors have four months to make a claim against the estate.
Step Three: Get an EIN
Visit irs.gov to obtain a tax identification number (EIN). You should never use the decedent’s Social Security number or your personal Social Security number for estate purposes.
Step Four: Collect the Assets
Next you will collect all probate assets. Probate assets are those the deceased died owning in his or her name individually. A personal representative does not have authority over assets that have joint owners or assets that have beneficiary designations (called non-probate assets). To collect the probate assets, open a new bank account for the estate, close the decedent’s financial accounts, and deposit those funds into the new estate account. Depending on the estate and terms of the Will, you may also sell assets such as cars or real estate. Sale proceeds should be deposited into the new estate account.
Step Five: Prepare Inventory
While collecting the estate assets, keep good records. You will need to prepare an inventory. The court has a form for this as well. The inventory identifies all assets owned by the decedent at the time of death and provides the value of each asset on the date of death. This does not need to be filed with the court, but it must be provided to all beneficiaries within three months of your appointment.
Step Six: Pay the Bills
As a reminder, creditors have four months to make a claim against the estate. For that reason, you should wait those four months before making any distributions to the beneficiaries. Until then, only pay the necessary estate expenses and bills such as maintenance costs for estate-owned property.
The following amounts are also paid prior to any creditors:
- Homestead, exempt property, and family allowances
- Costs and expenses of administering the estate, including your fees, if any, legal and accounting fees, and court costs and filing fees
- Funeral expenses
After these payments, you must then pay or settle all valid claims against the estate. This includes MaineCare claims.
Step Seven: File Tax Return
You may need to file the decedent’s final income tax return. If the estate itself earns income, you may also need to file a fiduciary income tax return for the estate. Under the current estate tax thresholds, most estates are not subject to federal estate tax or Maine estate tax. If you have questions, you should consult with an accountant to address these issues.
Step Eight: Prepare Final Accounting & Plan of Distribution
We recommend preparing an accounting and plan of distribution prior to making any distributions from the estate. The accounting starts with the inventory (step five) and lists all income to the estate and expenses of the estate. The plan of distribution outlines how the net value of the estate will be divided. Provide these items to the estate beneficiaries.
Step Nine: Distribute Estate Assets
After all duties are complete and the beneficiaries have agreed (in writing) to the plan of distribution, distribute the estate assets. You must follow the terms of the Will. If there is no Will, the assets must be distributed to family members as provided under Maine’s intestacy statute.
If the estate includes real estate, we highly recommend working with an attorney. You will need to file a discharge of estate tax lien with Maine Revenue Services and sign a Deed of Distribution to retitle the property.
Step Ten: Close Estate
Nine months after the death of a decedent an estate is eligible to close as long as all steps have been completed. To close an estate you will submit a Sworn Statement of Personal Representative Closing Estate (another court form). Once the court accepts the Sworn Statement, the estate is closed and you are relieved of your duties!