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This is the letter we send to all new clients that we represent on estate administration cases. Feel free to use it as an information guide:

Dear Client,

This letter is to provide an overview of the estate administration process and your responsibilities as the administrator. Throughout this process you have retained us to represent you as administrator of the estate and provide legal advice. In that role, we will prepare court pleadings and forms for filing based off the information you have provided, ensure deadline requirements are met, and help resolve any disputes or claims. It is important to understand that it is your ultimate responsibility to fulfill your duties as administrator of the estate, including the responsibility of maintaining an ongoing accounting with detailed explanation of incoming and outgoing payments, following the rules and laws about accounting and distribution throughout administration of the estate.  

It can be an overwhelming process to navigate through on your own, and that is why we are here to help! We will walk you through every step of the way, beginning with this overview of what to expect. There are a few big steps that can be broken down into more detail. This letter is a general overview. Please review the Court’s estate administration packet at the following link for more details: https://www.courts.nh.gov/self-help/estates or Administering an Estate (PDF)  

Duties of the Personal Representative 

If you have been named to be the administrator, executor, or personal representative (these terms are often used interchangeably and for purposes of this letter have the same meaning) of someone’s estate, they have entrusted you with the responsibility of ensuring the wishes they have expressed within their will are executed. If you are the person named within the will, your main job will be to collect all the deceased persons (decedent’s) money and property, pay all of their remaining bills, debts, and other financial responsibilities, file the deceased final income tax return and the tax return for the estate, and then distribute what is left to the people named as beneficiaries in the will. If the deceased did not have a will the same process will be completed but in that case distribution of remaining assets will be dictated by New Hampshire laws. 

Timeline of Duties 

  1. Petition for Probate Administration: The first filing is the petition with the Probate Court to become the administrator. If there is a will, it typically nominates a person to be administrator. If not, often the closest living family member is the logical person to file the petition. Regardless of whether the deceased did or did not have a will that appoints an administrator, it is still necessary to file the petition with the Court to become administrator. The Court has the final decision on who to appoint. If more than one person seeks appointment, the Court will have to decide who is best suited. Each person making the request will likely submit evidence or arguments as to why they are best suited. 
  2. Posting of a Bond: Often, especially if the estate includes real estate or significant assets, the Court will require that the administrator post an insurance bond to be appointed. The bond is issued by an insurance company and protects the beneficiaries or creditors from fraud or negligence by the administrator. If the administrator fails in any of their obligations, the insurance company will pay for the mistakes. If a bond is required, the Court will usually issue a conditional appointment, that is not final until a bond is posted with the Court. 
  3. Appointment of Administrator: After the bond is posted, the Court will issue a final administrator appointment. The certificate of appointment is critical as banks, creditors, the IRS, and other important third parties generally will not be authorized to communicate with someone until they are formally appointed by the Court. Certainly an appointment will be required before the administrator can gain access to any assets in the decedent’s name. 
  4. Gathering up all the decedent’s assets: Usually, the administrator will need to open a bank account in the name of the estate, which will require obtaining an employee identification number from the IRS (“EIN”). The administrator will then need to locate and consolidate all assets of the decedent, including real estate, if they owned any, their bank accounts, and their personal property, like cars, boats, motorcycles, valuables, etc. Once they have gathered everything together, the Court requires you to file what is called an inventory. Essentially, it is a list of everything the decedent owned and what it was worth, on the day of their death.  
  5. Managing the Estate and paying debts: The estate has to be open for at least 6 months, but often times it is open longer than that. As a result, you as the administrator are responsible for managing the estate’s assets. After the inventory is filed, you will need to identify and pay off any debts that the decedent had before their death.  These debts can be fees like the Court’s filing fees or attorney’s fees, or they can be bills like funeral expenses, medical bills, credit card bills, or a mortgage on their home. Any money that the decedent owed to anyone must be paid from the decedent’s money and assets. If you have any questions regarding payment of a debt it is important that you contact our office prior to paying the debt. Always remember that estate funds are not to be used to pay for anything that is not an estate related expense, such as personal expenses. Using estate funds for unrelated expenses, without permission from the Court, could be considered a criminal offense and result in charges being filed against you. 
  6. Tax Deferred Retirement Accounts: While managing the estate the administrator will also be responsible for identifying tax deferred retirement accounts, such as an IRA or a 401(k). There are special rules about these accounts since the income tax has been deferred and needs to be paid when the money is distributed. How and when this money is taxed can be complicated, and the laws on inherited retirement accounts have periodically changed. Prior to doing anything beyond identifying retirement accounts and balances we strongly recommend contacting an accountant to discuss potential tax liabilities. If you need a referral to an accountant, please let us know.     
  7. Filing the accounting and tax returns: During the period when the estate is open (i.e., the period when the estate is paying bills and maybe collecting money), you must keep track of what money is received by the estate and what money has been spent. Additionally, as the administrator you are responsible for filing all federal and state tax returns for the decedent and their estate. Again, we strongly recommend contacting an accountant for assistance in determining if returns need to be filed and when. Once a year, we will help you prepare and file what is called an accounting. It simply tracks what money has been spent, where it went, how much money is left in the estate and confirms any tax returns required for that period have been filed. Please remember that while we represent you as the administrator of the estate and are here to provide legal advice as needed, it is your ultimate responsibility to keep detailed and accurate records, a full ongoing accounting at all times and follow the rules and laws about accounting and distribution.   
  8. Closing the estate: Once all debts have been paid a final accounting will be filed, distributions will be made to beneficiaries and the Court will issue a ruling to close the estate.    

As you move through the process of administering the estate, we will be there to help you every step of the way. Please do not hesitate to contact us with any questions you may have. 

Sincerely,

 

 

Andrew Winters 

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