CHAPTER 9: PROBATE AND ESTATE ADMINISTRATION MATCHING a. interested parties b. independent administration c. “qualified small estate” d. summary administration e. petition for administration f. citation g. federal employer identification number h. inventory i. cause of action j. appraisal 1. A court order that fixes a date, time, and place for hearing the petition to prove a will or for administration; the petitioner is required to give notice of the hearing to all interested persons 2. The right of a person to commence a lawsuit

3. Beneficiaries or heirs and creditors of the decedent 4. A form of administration that is generally limited to small estates that have survivors, which include a spouse and minor children, and insufficient assets to pay all creditors

5. A filing with the court that a person seeking appointment as personal representative uses when there is no will

6. A complete physical check of all probate assets owned by the decedent and a detailed listing of these and their estimated fair market value at the time of the decedent’s death

7. A form of estate administration used in a few states that is essentially free of court supervision or intervention

8. A market-based valuation of a decedent’s real or personal property by a recognized expert

9. An identification of the fiduciary responsible for preparing the fiduciary income tax return and for paying any tax due

10. An estate that consists entirely of statutorily exempt property or allowances and funeral and administration expenses and is within a certain limited monetary value 1. ANS: F 2. ANS: I 3. ANS: A 4. ANS: D 5. ANS: E 6. ANS: H 7. ANS: B 8. ANS: J 9. ANS: G 10. ANS: C

TRUE/FALSE 1. Probate and estate administration are the only methods of settling an estate. ANS: F False Correct. Small estate settlement and administration is an alternative to probate. True Incorrect. Some states allow heirs or devisees to collect, divide, and distribute assets in small estates.

2. Summary Administration is allowed for certain small estates. ANS: T True Correct. Summary Administration is shorter and simpler than regular estate administration. False Incorrect. Many states allow both a collection by affidavit and a Summary Administration procedure.

3. Under the Uniform Probate Code (UPC), formal probate is conducted under the supervision of a judge without notice to interested persons. ANS: F False Correct. Informal probate does not require notice to interested persons. True Incorrect. Interested persons must be given notice for formal probate.

4. All states are required to adopt the Uniform Probate Code (UPC). ANS: F False Correct. States may adopt the UPC, but they are not required to do so. True Incorrect. Many states continue to use more traditional methods of estate administration.

5. Prior to a hearing, a paralegal might be asked to assemble data on nonprobate property. ANS: T True Correct. The paralegal may also be asked to send copies of the will to the appropriate beneficiaries. False Incorrect. Taxes may still be due on nonprobate property.

6. Creditors can contest a will, but they cannot challenge the appointment of a personal representative. ANS: F False Correct. Creditors can challenge the appointment of a personal representative. True Incorrect. Creditors cannot contest a will.

7. A personal representative is required to file for a Federal Employer Identification Number. ANS: T True Correct. This number is required before a Notice Concerning Fiduciary Relationship can be filed. False Incorrect. This number is required on fiduciary income tax returns.

8. If a decedent leaves real property in another state, the paralegal will need to check the foreign state’s statutes to determine the qualifications and residency requirements of the ancillary administrator. ANS: T True Correct. The paralegal should check to see if the domiciliary personal representative qualifies. False Incorrect. The ancillary administrator will administer out-of-state property.

9. When transferring real estate assets, it is the responsibility of the paralegal to prepare the Report of Sale of Land at Private Sale Under Order for Sale. ANS: T True Correct. This report should be filed with the court. False Incorrect. Preparing documents is an important paralegal duty.

10. If an estate includes digital assets and the decedent has left instructions on how to access those assets, the personal representative may still be precluded from doing so because of state and/or federal law. ANS: T True Correct. Issues relating to accessing and transferring digital assets may be barred by federal and state law and the ISP’s terms of service. False There could be penalties if a personal representative accesses digital assets without proper authority.

11. The personal representative may personally profit from estate transactions. ANS: F False Correct. Profit taking violates the fiduciary duty to the estate. True Incorrect. The representative is not allowed to buy or sell estate property while retaining a personal interest.

MULTIPLE CHOICE 1. The probate court has the power and authority to do all of the following EXCEPT: a. Determine and verify the statutory rights of a spouse b. Create a will if none exists c. Supervise the guardianship of minors d. Establish the validity of a will and appoint a personal representative ANS: B Create a will if none exists Correct. The probate court appoints an administrator if there is no will. Determine and verify the statutory rights of a spouse Incorrect. Courts have the authority. Supervise the guardianship of minors Incorrect. If found incompetent, a guardian can be removed. Establish the validity of a will and appoint a personal representative Incorrect. The court can also appoint an administrator if there is no will.

2. Estate administration may NOT be needed if: a. There is property in registered form b. The decedent has individually owned property in the possession of a third party c. There are outstanding creditors’ claims d. An estate is classified as a small estate ANS: D An estate is classified as a small estate Correct. Estate administration may not be needed if all assets consist entirely of exempt property with a limited monetary value. There is property in registered form Incorrect. Registered property includes deeds and certificates for securities. The decedent has individually owned property in the possession of a third party Incorrect. Letters of Authority are needed to transfer such property. There are outstanding creditors’ claims Incorrect. However, estate administration might not be needed if the decedent has no debts.

3. When settling a small estate, Collection by Affidavit is generally allowed in all of the following situations EXCEPT: a. When two days have passed since the death of the decedent b. When the value of the entire estate does not exceed the state’s maximum limit c. When the claiming beneficiary is legally entitled to inherit the decedent’s estate d. When no application or petition for the appointment of a personal representative is pending or has been granted ANS: A When two days have passed since the death of the decedent Correct. The minimum number of days that must pass is generally 30 to 45. When the value of the entire estate does not exceed the state’s maximum limit Incorrect. However, if the value exceeds the limit, the estate might not qualify as a small estate. When the claiming beneficiary is legally entitled to inherit the decedent’s estate Incorrect. However, if the claiming beneficiary is not legally entitled, lengthier probate procedures will be needed. When no application or petition for the appointment of a personal representative is pending or has been granted Incorrect. Such an application would involve a lengthier probate process, and the estate might not qualify as a small estate.

4. The primary purpose of the Uniform Probate Code (UPC) is to: a. Make estate administration more expensive b. Increase the time required to administer an estate c. Provide an alternate system that establishes uniform law d. Make the laws more complex so that administration is more involved ANS: C Provide an alternate system that establishes uniform law Correct. Such a system needs to be adopted by the states. Make estate administration more expensive Incorrect. The UPC was created to make administration less expensive. Increase the time required to administer an estate Incorrect. The UPC was created to reduce the time required for administration. Make the laws more complex so that administration is more involved Incorrect. The UPC was created to simplify and clarify administration procedures and laws.

5. Which is NOT a way that the paralegal assists the personal representative? a. Petitioning for probate when no will exists b. Arranging for publication of the Notice of Order for Hearing and Affidavit of Mailing Notice to all interested persons c. Identifying and reviewing objections and arranging for the appearance of witnesses d. Mailing a notice of rights to the spouse and minor children ANS: A Petitioning for probate when no will exists Correct. The paralegal petitions for administration when no will exists. Arranging for publication of the Notice of Order for Hearing and Affidavit of Mailing Notice to all interested persons Incorrect. All interested persons include creditors. Identifying and reviewing objections and arranging for the appearance of witnesses Incorrect. This is a common paralegal duty in any type of case. Mailing a notice of rights to the spouse and minor children Incorrect. This notice also involves preparing an Affidavit of Mailing.

6. To establish jurisdiction, the petition to prove a will must generally include: a. The decedent’s place of birth b. The estimated value of the real and personal nonprobate assets c. The amount of debts paid prior to the death of the decedent d. The original will ANS: D The original will Correct. The original will is not needed only if that will has already been filed with the court. The decedent’s place of birth Incorrect. However, the decedent’s domicile and place of death are required information. The estimated value of the real and personal nonprobate assets Incorrect. Only the value of the probate assets is required. The amount of debts paid prior to the death of the decedent Incorrect. Such debts would cease to be debts when they were paid.

7. When petitioning for administration when no will exists, which of the following is a duty of the paralegal? a. Ensuring that the petition and death certificate are filed b. Filing the Affidavit of Publication c. Collecting all information needed to complete and execute the petition for probate of will d. Arranging for witnesses to appear in court to testify on behalf of the testator ANS: A Ensuring that the petition and death certificate are filed Correct. Either the paralegal or the personal representative can file the petition. Filing the Affidavit of Publication Incorrect. This is filed when arranging for the publication of the Notice of Order for Hearing. Collecting all information needed to complete and execute the petition for probate of will Incorrect. If there is no will, it cannot be probated. Arranging for witnesses to appear in court to testify on behalf of the testator Incorrect. If there is a testator, there is a will.

a. Act as creditors’ admissions of payment b. Establish a record of all payments and distributions c. Serve as evidence and verification of payment of taxes d. Act as a credit account until estate funds are released ANS: D Act as a credit account until estate funds are released Correct. Estate funds are used to create the account. Act as creditors’ admissions of payment Incorrect. The signature of the creditor shows admission of payment. Establish a record of all payments and distributions Incorrect. This is why the estate account should only include estate funds. Serve as evidence and verification of payment of taxes Incorrect. The cancelled checks act as receipts.

9. Which procedure occurs during the final account and closing of the estate phase? a. The hearing on creditors’ claims and payment of allowed or approved claims b. The computation and filing of a state inheritance tax return or waiver c. The opening of the safe deposit box d. Notice to creditors ANS: B The computation and filing of a state inheritance tax return or waiver Correct. A copy of the order allowing the final account is filed. The hearing on creditors’ claims and payment of allowed or approved claims Incorrect. This hearing takes place during the distribution of the decedent’s estate. The opening of the safe deposit box Incorrect. The safe deposit box must be opened before estate distribution. Notice to creditors Incorrect. Creditors receive notice prior to the appointment of trustees and guardians.

10. Which will NOT be issued by the court during the special administration process? a. Inventory and Appraisal of the personal property of the decedent b. Order Approving the Final Account and Report of the Special Administrator c. Letters of Special Administration d. Order Granting Special Administration ANS: A Inventory and Appraisal of the personal property of the decedent Correct. The Inventory and Appraisal will be filled out and filed by the special administrator. Order Approving the Final Account and Report of the Special Administrator Incorrect. This order allows the final account and discharges the special administrator. Letters of Special Administration Incorrect. These Letters are issued by the court to confer appropriate powers upon the administrator. Order Granting Special Administration Incorrect. This order essentially appoints the special administrator.