DUTIES OF A PERSONAL REPRESENTATIVE IN A PROBATE ADMINISTRATION
COMMENCING A PROBATE ADMINISTRATION. A probate administration is necessary to transfer all assets held in a deceased person's ("the decedent") individual name. The process begins with filing the Petition to Probate Estate and the original Will (if one exists) with the Probate Court. The petition requests both the appointment of the personal representative and admission of the will to probate. Within approximately two weeks of the filing of the petition, the probate judge will sign an order approving the petition, and the court will issue "Letters Testamentary" certifying the appointment as personal representative, who is now authorized to deal with all the facets of the estate, including paying creditors' claims, managing real property, transferring bank accounts, and any other duties that become necessary to wind up the financial affairs of the decedent.
NOTICE TO INTERESTED PERSONS. After filing the petition, a notice is published in the local newspaper regarding probate of the will. This puts creditors on notice that they have four months within which to file claims against the estate for payment of their accounts. The personal representative, with the help of his or her attorney, must also prepare and mail notice of the probate administration to the heirs advising them of the appointment of the personal representative and informing them about how to obtain information about the estate. This notice to heirs and the published notice for creditors are required by law.
ASSET VALUATION. An inventory of the estate assets must be filed within 60 days of the appointment as personal representative. For tax purposes, the personal representative must identify and value all non-probate assets owned by the decedent. These assets include any jointly owned assets, life insurance, annuities and retirement accounts.
FINAL PERSONAL INCOME TAX RETURN. The personal representative is responsible for preparing the final state and federal income tax returns for the decedent for the period from the first of the year to the decedent's date of death, which are due on or before April 15 the following year.
FEDERAL ESTATE TAXES AND OREGON INHERITANCE TAX RETURNS. If, in year 2010, the decedent's total assets (including life insurance and other death benefits) are over $3.5 million, a federal estate tax must be filed. If the decedent's total assets are over $1 million, an Oregon state inheritance tax return must be filed. Both tax returns are due nine months from the decedent's death absent a request for an extension of time to file. Any tax due must be paid on the nine-month due date.
FIDUCIARY INCOME TAX RETURNS. The estate is a separate taxpayer and it is generally necessary to file income tax returns for the estate, reporting income received after the date of the decedent's death and prior to distribution. If the estate is distributed within a 12-month tax reporting period (either a calendar year or a fiscal year), the income tax liability will flow out to the estate devisees, to be reported on their individual tax returns and the estate will pay no income tax.
DISTRIBUTION OF ESTATE. Once the creditors claim period referred to above expires, and all tax matters are resolved, the personal representative will petition the court for authorization to distribute the estate. As part of that process, the personal representative must file a detailed accounting reporting all the property in the estate presently on hand, and all income received and disbursements made during the probate process. The petition also includes a request that the personal representative be authorized to pay attorney fees and costs, accountant fees, if any, and the personal representative fee, if elected.
CLOSING THE ESTATE. Once distribution is completed, the personal representative files a petition with the court to discharge the personal representative and close the estate.
TIMEFRAME. Absent complications, the probate process for a non-taxable estate, takes 5-6 months. During that time, all cash from the estate must be kept in a separate, interest-bearing account, such as a money market account or a short-term certificate of deposit, in the name of the estate. Any money received by the personal representative must be deposited into the estate bank account. It is forbidden to commingle estate funds with personal funds.
PERSONAL REPRESENTATIVE'S FEE. The personal representative is entitled to a fee for services rendered on behalf of the estate. The statutory fee is approximately 2% of the value of the probate estate.
ATTORNEY FEES. Oregon law authorizes payment from the estate of reasonable attorney fees based on the following factors: counsel's experience in probate matters; the skill displayed; the excellence of the result obtained; the time invested; the amount of responsibility assumed by counsel considering the total value of the estate; and customary fees in the community for like services. The attorney will maintain an itemized record of legal services rendered in the administration and will submit to the personal representative and the probate court an itemization of services rendered at the time of filing the final account. Attorney fees are paid after court approval and typically at the time the estate is ready for distribution. The personal representative's fee and attorneys fees must be approved by the court before payment from the estate. At the outset of an estate administration, it is difficult to predict with accuracy the actual amount of attorney fees which will be incurred to complete all tasks. Generally, the fees for customary legal services rendered in the administration of an estate are comparable to the statutory personal representative's fee. When unusual or extraordinary legal services are required, however, additional fees will be charged.
COSTS. In addition to fees, the estate will incur costs for court filing fees, copies of documents and publication costs.
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