Chapter 7, Chapter 8, Chapter 9, Chapter 10, Chapter 11
Some states call the Summary Administrator the "__________________"
Voluntary Administrator
Special Administrator
administrator who is appointed by the Court to administer some portion of the estate, or who is appointed as an interim administrator until the Letters Testamentary have been filed and the administrator officially appointed.
Clerk of Court
(Registrar, surrogate, Register of Wills) A person at the probate court charged with keeping records and at times acts on behalf of the court (usually in informal proceedings)
PR must provide to Court and to certain persons and the requesting interested persons the inventory within:
3-6 months of appointment
Bond
A certificate whereby a surety company promises to pay money if the PR of a deceased fails to faithfully perform the duties of administering the decedent's estate. It is essentially an insurance contract.
Generation Skipping Transfers - Direct Skip
A generation skipping transfer of assets made to a "skip" person (a person received property who is two or more generations younger than the transferor) The transfer from a Grandparent to a grandchild while the parent is alive is a direct skip but if the parent is not alive it is not a direct skip
Appraisal
A market-based valuation of the decedent's real or personal property by a recognized expert.
Final Account and Closing the Estate:
prepare and file a "final account" submit to the distributees then distribute the remaining assets and seek discharge.
The domiciliary state has jurisdiction over the decedent and ALL of the decedent's property except __________________ located in other states.
real property
Letters Testamentary & Order of Appointment
Conclusive proof and evidence that the person named is duly appointed, qualified and acting personal representative of the decedent's estate with the powers, rights, duties, and obligations conferred by law.
Indicia of Domicile
Conduct, where one banks, goes to church, buys license plates, pays state taxes, and votes, etc.
General Tax Consideration
Congress continually revises the tax laws of the U.S. These changes often have significant impact on Estate Planning.
Generation Skipping Transfers
Congress does not want people to skip generations because they get less tax payments so they created a tax on transfers that skip a generation
Inventory
Detailed lost of property and other assets containing a description of the designation of each specific item and its value at the time of the decedent's death
SC 62-2-801
Disclaimer when it comes to Wills or property interest, etc
Gift-Splitting
Donor and spouse can agree to allow Gift to use both spouses gift exclusion of $15,000..00 thus allowing married couples to transfer $30,000.00 to each donee. Gifts made above this amount are added to the decedent's taxable estate and subject to a federal estate tax. If gift tax was previously paid then it is given a credit and deducted from the amount owed.
2 types of death tax:
Estate and Inheritance
State income taxes are not involved in these states
FL, AK, NV, SD, WA, WY, TX
PR Tax Penalties
Failure by the PR to pay such tax can result in the PR being personably liable for interest and penalties accruing due to their neglect. PR is also liable for the tax bill if he distribute the estate assets not leaving enough to pay the tax bill
True or False. Informal Probate is supervised by the Probate Court and DOES require notice to be given to interest parties.
False
True or False? The PR should not have a reminder system to keep the administration on track.
False
Appointment Procedures: PR
File OG Will, File petition for probate of the WIll and Appointment of PR or file for administration and appointment of the FR, contacts witnesses of the WIll, file a Death Certificate, pay filing fees, arrange for bond is necessary
Solemn Probate
Formal probate that requires court supervision throughout - requires notice to be sent to all "interested parties"
PR can do this before the Probate Process:
Funeral arrangements, death certificate (get 6+ copies), hire an attorney, find the Will, contact decedent's financial advisors, convene a family conference, advise surviving spouse of right to get an attorney and the elective share option, discontinue ongoing billings.
The "__________" (or just "Estate") includes both Probate and Non-Probate property and is subject to federal and state taxes when the owner dies.
Gross Estate
The PR can apply for ____________________ based upon the value of the decedent's probate estate being less than a certain amount. Shorter and simpler than regular estate administration.
summary administration
Typically the term Executor refers to the PR of a ________ estate
testate
Fiduciary Duty
Must act reasonable and in good faith then no personal liability for a decrease in the estate value - if he/she fails to act reasonable or in good faith, they may be liable for the decrease in value of the estate.
Domicile (domiciliary estate)
The state in which the decedents domicile is located - legal home where a person has a true, fixed, and permanent place of dwelling to which a person intends to return to when absent.
Gift tax - Federal
This is levied on the transfer of property during life. Levied against the donor not donee
True or False? Is is the PR's duty to see that the procedures and forms are properly and timely executed.
True
True or false: It is possible to use Informal Probate but also use the formal process for certain challenged or problematic areas.
True
Charitable Deductions
Under tax law, a contribution to a qualified charity or other tax-exempt institution for which a taxpayer may claim an income tax deduction - Also applicable to trusts qualifies for an estate tax deduction
Priority of Appointment - informal and formal probate
1. Person named as the PR in the Will 2. The surviving spouse IF a devise of the decedent 3. Other devisees of the decedent 4. Surviving spouse 5. Other heirs of the decedent 6. A creditor Court still must appoint this person and will not appoint them if they are unwilling or unqualified.
Family Settlement Agreement
A private written agreement among heirs of an estate by which the parties agree on the distribution of the decedent's estate without supervision by the court.
Public Administrator
A public official appointed by the court to administer the property of the intestate who has left no kindred entitled to apply for appointment.
Ancillary Administration (AA)
Additional administration used to dispose of and distribute that portion of the decedent's estate located in a state other than the decedent's domiciliary state. Will is admitted to probate in each state where the property is located.
Lifetime Gifts
All taxable gifts starting in 1977 are added to the decedent's taxable estate and subject to the estate tax. Remember: Any taxes already paid on these gifts will be deducted from the estate tax owed. Not included is up to $15K per year of gifts. Caution: Because the gift must be intended and delivered by the donor it can no longer be controlled by the donor.
Foreign state
Any state other than the decedent's domiciliary state.
Unified Transfer Gift and Estate Tax Rates
Any taxpayer who died leaving a taxable estate of the value of the exclusion amount or less would not be liable to any federal estate tax. Changes have had an impact to lower or eliminate death taxes against smaller estates.
Tax Relief Act of 2020 - Portability
Applied to a surviving spouse and allows the surviving spouse to combine the unused portion of the predeceased spouse's estate or gift tax exclusion amount with the surviving spouse's applicable exclusion amount at their death. The amount of the applicable credit amount (unified credit) allowed cannot be greater than the amount of the computed transfer tax.
PR Hold and Manage the Estate:
Holds title similar to a trustee and has similar management duties.
Common Probate
Informal probate that has limited court supervision - does not require notice to be sent to "interested parties"
Local Probate Judge:
Judge Kenneth E. Fulp, Jr., selected by vote
Letters of Administration
Legal document issued by a court that shows an administrator's legal right to take control of assets in the deceased person's name.
Federal and State Estate Tax
Levied on the Estate - not on the successors (UPC term for a person entitled to property under a Will or through intestacy) Tax rate depends on the size of the estate Applies only to the amount that exceeds the Unified Credit Exemption (UCE) in 2020 it is $11,580,000.00
Domiciliary (primary) Estate Administration
Occurs in the state the decedent domiciled.
State Inheritance tax
Often levied on the successors depending on how much is received and their relationship to the decedent - Not all states have such a tax (14 states have it - also called a succession tax)
____________ initially meant the act or process of proving or validating of a Will. Now it generally refers to all matters over which the (probate) court has jurisdiction.
Probate
Only the "______________" is subject to creditors claims: This includes property owned solely and in tenancy in common.
Probate Estate
SC Code 62-1-302
Probate court has exclusive original jurisdiction over all subject matter related to... (a)(1) estate of decedents, including the contest of wills, construction of wills... (a)(3) trusts...
Collection Affidavit
Procedure whereby the court allows beneficiary, devisee, or heir to present a certified copy of the decedent's death certificate to the debtor or possessor of property with an affidavit stating certain things in order to have property transferred to them. The Affidavit states that the estate value is limited, that some number of days have elapsed since death, that the beneficiary has a legal right to the property and that there is no PR. The Affidavit procedure can be used to transfer insurance proceeds, accounts, promissory notes, and other property so long as the value does not exceed the statutory max. Cannot transfer real property
Informal Probate
Proceeded conducted without notice to interested persons by an officer of the court acting as a registrar for probate of a Will or appointment of a PR
Formal Probate
Proceedings conducted before a judge with notice to interested persons (UPS 1-201[17])
Personal Representative
SC Code 62-1-201 - Definition includes executor/executrix, administrator/administratrix, successor personal representative. The person or corporate institution, appointed by a proper court to administer the estate of a decedent who died with or without a will. Considered a fiduciary for the beneficiaries of the Estate.
2 states that tax only dividend and investment income:
TN & NH
Income Tax
Tax on income recieved (personal, corporate, trust) (also interest and dividend income possibly)
Death Tax
Tax on the amount of property transferred at death
If the PR fails to notify an interested party that has demanded notice....
The PR is personally liable for any damages suffered by the demandant as a result of failing to get notice.
Administrator de bonis non (BDN)
The administrator of goods not administered Appointed in this Situation: Replacement for originally appointed PR who has begun but failed to complete the administration.
Administrator cum testamento annexo
The administrator of the Will annexed Appointed in 2 situations: 1. Maker of the Will does not name an Executor 2. Named Executor is not qualified to serve
Residence
The dwelling in which one temporarily lives or resides.
Venue
The particular place, city or county where a court having jurisdiction may hear or decide a case.
It is the duty of the PR to file the decedent's ______________ for the year of death and to see that any ________________ is paid out of estate assets. The PR should also file taxes after death for the close of the taxable year or until the final distribution of the estate - these returns are called US fiduciary income tax return
income tax
Typically the term Administrator refers to the PR of a ________ estate
intestate
Benefits of informal probate
less time, less complicated with less steps, less appraisal, easier to distribute, usually no bond required
