Notes for Personal Representatives and Their Attorneys

Oklahoma Probate Notes

This handbook is designed to serve as a guide to help clients know what to expect from their attorneys and their probate cases.  This handbook cannot take the place of individualized advice of your attorney.  This is a summary of your responsibilities and tasks, and it is not a comprehensive probate guide.  It may, however help you ask much better questions of your attorney, reduce wasted time, and increase the amount of money that you are  able to enjoy at the end of your case.

Remember that you, the Personal Representative of the estate, have a fiduciary duty to the estate. You must always act in the best interest of the estate, and never put your own desires ahead of the best interest of the probate estate.  There are financial penalties that may be assessed against a Personal Representative who neglects her duties or puts her own interest ahead of the estate’s interest.  If there should come a time that you cannot put the estate interest first, it is better to resign your position and not risk the embarrassment and financial penalties that could come your way if you fall short of fulfilling the duties of your position.

Introduction to Probate

Under Oklahoma law, much of the property of a deceased person passes only under the supervision of the probate court.  The existence of a Last Will and Testament is insufficient, standing alone, to transfer ownership of the deceased person’s property to the ownership of the person named under the Will.  It is necessary to work through the probate process to receive a court order that makes the directives in the Will effective.

 The Oklahoma Statutes provide that all property of the decedent passes to the heirs or beneficiaries only under the supervision of the probate court.  Perhaps the reason that the legislature has required court supervision is to protect heirs, creditors, beneficiaries, and surviving spouses from the unscrupulous.  Whatever the reason, Oklahoma law leans towards everyone receiving notice from the court before anything substantive happens.

In addition to the statutory notice requirements, there is a very practical need for probate proceedings in Oklahoma.  When one dies, there is no one who can sign their deeds, titles, checks, and so forth.  But when the Court grants someone Letters of Administration, that person is tasked with gathering the decedent’s assets together (also referred to as marshalling the assets) in preparation for the payment of debts and distribution the the heirs.

Advantages of Probate

Probate, although feared by some, has some important advantages.
(A) You will be able to limit the creditor’s time to make claims, thereby avoiding the chance of a successful lawsuit years after the date of death.  The deadline for a creditor to bring a claim is usually be controlled by the “statute of limitations” and is usually measured in years.  Your probate attorney can (and should) limit that time to a couple months.  This is a very important advantage and I will discuss it further below.

(B) The probate may be necessary in order to pursue lawsuits on behalf of the deceased person. Only the Personal Representative of the Estate can bring certain claims.  For example, if your deceased loved one was the victim of medical malpractice, or even an automobile accident, the personal representative will be the person who has the right and power to bring a lawsuit against the person who caused the untimely death.

(C) There will be court supervision to assure that everyone gets a chance to point out possible problems.  The heirs will get notice of the important court actions and will be able to come to court and file their objections when that is necessary. The Personal Representative will create and file written accountings that will help the heirs know what is happening and what, if anything, they should do.  In the absence of court supervision the heirs are left to rely on the good will and good character of the person who is controlling the distribution.  Further, the personal representative has the right to seek and receive a release of liability from the court when they have managed the estate affairs in a manner that follows the law and the court’s orders.

(D) Even insolvent estates (or potentially insolvent estates) can benefit from probate.  Some creditors will not file claims and will not have to be paid. The creditors who do file claims will be paid in accord with the state law of priorities among creditors and the family will be spared the harassing telephone calls, the multitude of collection letters, and the threats of litigation.

Here are some Sample Probate Pleadings.  Please keep in mind that using these without expert advice that is tailored to your situation makes no more sense than operating on your kidney using a medical book that you found online.  These are provided only for the purpose of helping you understand what to expect and what information your attorney is going to need to see.

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NOTES CONCERNING YOUR “NOTICE TO CREDITORS”

As I mentioned above, one of the most valuable results that you can receive in probate is the early termination of the rights of creditors to bring lawsuits in an attempt to receive money from the estate assets.   This is very important as the terrible inconvenience that would arise from a lawsuit that asserts you received and spent money from the estate when that money should have been paid to creditors could make a person lose sleep and worry years off their life.

In order to receive an inheritance that is not subject to the risk of such a suit, there are some actions that you can and should take during probate.  First, forward the decedent’s mail to your address and watch carefully for bills and notices that may help you find creditors.  Take copies of such items to your probate attorney and watch to be sure that the creditor is on the affidavit of mailing that evidences the Notice to Creditors was mailed correctly.

Second, you should always give notice to a hospital that cared for the decedent during the last months.  The Oklahoma Supreme Court has decided that it is reasonably knowable that the hospital where the decedent died is a knowable creditor.  That same rationale is likely to be found to apply to the decedent’s physician, the ambulance, and many more.

Third, you should read the Explanation of Benefits that the insurance companies send to the covered person when the insurance company pays a claim.  If a laboratory has received a partial payment from the insurance company, for example, it is reasonably knowable that the laboratory should receive a Notice to Creditors and have the opportunity to file a claim in the probate.

Fourth, consider buying a credit report on the deceased person.  A credit report may help you identify creditors more quickly than you would learn about them by waiting on the mail.

Fifth, do not exclude a notice to the mortgage company.  Especially if there is even a modest chance that the mortgage would not be fully satisfied by a forced sale, it is very important that the mortgage company be given notice and their appearing on your affidavit of mailing notice to creditors.

 APPROVING CLAIMS

The Personal Representative of the estate should affirmatively choose whether to approve each claim.  If the claim is approved, in whole or in part, the signed approval should be presented to the Judge by the attorney for the judge’s approval.  IMPORTANT NOTE: this does not mean that the claim can or should be paid immediately.  Occasionally there will be more claims than there are assets to pay claims.  In that event, refer to the statutes for the priority of payment of claims, seek a court order as to whom you pay and the sum you should pay them.  Keep in mind that the costs of the probate action (court costs, attorney fees, personal representative fees) are paid before most creditors are paid.

DENYING CLAIMS

The Oklahoma Statutes require the Personal Representative of the estate to give notice to the claimant when a claim is denied.  The claimant then has a short period of time to file a Petition asking the Judge to enter an Order that approves the claim.   Fundamental fairness (also known as due process) is likely to require that notice of claim denial must be given in order  to assure that the timeline imposed by the statute will be enforced by the courts.

INVENTORY AND APPRAISEMENT

One of the important tasks of the Personal Representative is the inventory and appraisement that is required by the Oklahoma Statutes.  In the briefest and simplest explanation this is a list of what the deceased person owned at the instant of death and the value of those assets.  In many instances the inventory and appraisement may be completed by the Personal Representative (PR) without expert assistance.  The PR may draft a simple list of what the decedent owned and list the PR’s best estimate of the value of the item(s) on that list.  The value assigned may bear no resemblance to the cost of that item when purchased, as the value of most items decreases over time, and a few assets increase in value over time.  The value assigned should be the the sum that represents what a willing buyer would pay a willing seller for that item in its current condition when neither the buyer nor seller were under pressure to make the sale or purchase.  Bank deposits, investments in stocks and bonds, and other such accounts should generally be listed at their balance on date of death.  Please note that there is an alternate valuation date and that you should discuss that issue with your tax advisor, particularly with a taxable estate.

FINAL ACCOUNT AND PETITION TO DISTRIBUTE

The Final Account is a list of the Estate income, Estate Expenses, and a report to the court and the heirs of what you, the Personal Representative have done during your time in control of the estate.  Excellent record-keeping will serve you well in creating this report.

It is important that you, the personal representative keep detailed records of your actions on behalf of the estate.  Keep contemporaneous records of all income and expenses, all of your travel, and all other efforts made for the benefit of the estate.  These bookkeeping tasks will make your Final Account and Petition to Distribute, far easier and less stressful.  Your local Judge may have specific items that he or she will expect to see in your accounting, so be sure to work closely with an attorney who practices in the court where the accounting will be reviewed and considered.  This report should also be mailed to all of the people who may receive from this estate. Therefore, be sure to retain your receipts and notes to support your report in case you are ever on the witness stand defending your actions.  If you can describe to the court what you did and why you chose that course of action, you are much more likely to be found reasonable, even if the Judge might have chosen a different option.

The Petition to Distribute the estate is often combined with the Final Account.  In that Petition you will describe the assets that are available for distribution and state to whom those assets will be distributed.  In some cases this is simple, such as “The entire estate will be distributed to the two surviving children in equal shares.”  In other cases this can be a complex and multi-step process, especially when there a minors or incapacitated persons receiving from the estate.

The attorney will file this Petition with the Court, enter an Order for Hearing and a Notice of Hearing.  The petition and the Notice of Hearing will be mailed to all of the people entitled to notice (usually all heirs at law and any beneficiaries under the Will).  At the hearing the people entitled to notice have the opportunity to object to the petition and have their objection heard by the Judge.  Most Judges require that the objection be in writing, filed with the court clerk and mailed to all parties.

After all objections have been considered by the court, an order is entered wherein the distribution of the estate is determined.  The Personal Representative, or her attorney, will write checks for the disbursement(s) approved by the court and the beneficiary will sign a receipt and release that will be filed in the court file.  When all of the receipts and releases have been filed, the attorney will deliver copies to the Judge along with a proposed discharge of the Personal Representative.  When this discharge is filed, the court case is complete.

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