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Decedent’s Estate Administration

Probate of a Decedent’s Estate takes two forms in Kansas, “testate” (the decedent died with an enforceable Last Will and Testament) and “intestate” (no such instrument existed). In both cases an interested person, such as a close relative or beneficiary of the estate, hires a lawyer who files a Petition with the Court and he or she asks to be appointed as Executor (testate) or Administrator (intestate). The Petition in a testate estate will ask that the Last Will and Testament, (“Will”) be admitted to probate. Interested persons are given formal notice of a hearing and this notice is printed in the newspaper in accordance with the Kansas statute. If interested persons believe that the Will is invalid or that the Petitioner should not be appointed as the fiduciary for the estate (both Executors and Administrators are fiduciaries and have special responsibilities), such persons may object and the Court will have a hearing; this seldom occurs.

If a person dies having written a Will, that Will must be preserved and filed with the Court, even if it is later determined that a probate estate will not be formally opened with the Court.

Typically, the fiduciary is formally appointed at a hearing held about 30 days following the filing of the Petition. If a bond requirement has not been waived by the Decedent in the Will, then the Court will require the fiduciary to obtain a bond with the help of his or her attorney, and also sign an oath of office. When these requirements are met, the Court will then issue “Letters Testamentary (testate) or Letters of Administration (intestate) (“Letters”). These formal Letters are often used by the fiduciary to establish a bank account for the estate or to obtain information from insurance companies and financial institutions.

While it is rare, creditors of the Estate have the power in Kansas to open an estate on behalf of the decedent, particularly when other interested persons have not come forward to do so. A creditor who does not do this, risks losing its rights to collect the indebtedness, as the Decedent’s family may believe that potential claims of creditors can be avoided by doing nothing and waiting

The fiduciary’s lawyer will work with the fiduciary to prepare an Inventory of the estate’s assets that usually must be filed within 30 days following the appointment of the fiduciary. Sometimes final values of certain assets are not known at this time, but to the extent the asset is known, it should be listed, as should be liabilities of the estate. Often, assets and liabilities are found later and the Inventory may be supplemented as more details are determined.

During the period of administration, the fiduciary will work toward liquidating certain assets such as real estate, motor vehicles, and other personal property. Often the Court will need to approve the sale of the same. However, the fiduciary generally does not have the power to distribute any assets of the estate to relatives or beneficiaries without specific Court order. Sometimes it is necessary or practical to ask heirs to hold or store certain assets during the probate proceeding, but the same is done with the understanding that the asset may have to be sold to pay creditor claims.

Creditors have four months to file claims in the estate and if they do not timely make a claim, their claim is subsequently barred. Thus, estates must be left open a minimum of four months, but generally are open longer, particularly if more time is required to liquidate certain assets.

The Executor or Administrator while acting as a fiduciary has to act in the best interests of the estate and never in his or her own best interest. Lawyers serve in a fiduciary capacity when representing clients; Guardians and Conservators also are fiduciaries.

When the assets have been liquidated or the other instructions of the Will have been followed, it is time to close the estate. The lawyer will prepare a Petition for Final Settlement, asking the Court to approve the payment of creditors, the payment of the fiduciary fees, those of the lawyer, and to approve the final distribution of the remaining assets of the estate. If it is a testate proceeding, then the distribution will be made as provided in the Will. If it is an intestate proceeding, the distribution will be made to the heirs at law. While Kansas intestate statutes are more complex than stated here, generally in Kansas ½ of the estate will go to the surviving spouse and ½ to the children of the decedent, or to the descendants of any pre-deceased children.

At the time the Petition for Final Settlement is filed, the fiduciary will also file a final accounting, containing the assets of the estate, the known liabilities, and a clear description of all income received and expenses paid during the administration of the estate. Thus, it is generally a good policy for the fiduciary to consolidate all accounts of the estate into one account that he or she is the sole signatory. Account entries in the final accounting often can be taken from the “stub book” for the checking account. Estate assets including accounts should never be mixed with those personal assets of the fiduciary.

Many assets are not distributed through a Probate proceeding in Kansas. These assets that are outside of Probate include: proceeds from a life insurance policy when a beneficiary is named as part of the insurance contract; joint tenant real estate and financial accounts; and accounts payable on death. The amount of money or the value of assets distributed outside of probate often has little effect on determining the amount of assets distributed through the probate proceeding unless the Will provides otherwise.

As the fiduciary makes the Court-approved distributions to the creditors (the lawyer and beneficiaries of the estate) each must sign a Receipt indicating receipt of their rightful payment. The Receipts are then filed with the Court and the fiduciary then obtains a much-earned Final Discharge from the Court and the estate will be closed. This Final Discharge should be provided to the bonding company if a bond was required, so that the bond is released, and no further premiums will be charged.

The fiduciary and his or her lawyer work together in performing these tasks with the lawyer leading the way and preparing the necessary paperwork. Often professionals must be hired to appraise and help sell assets of the estate. Legal fees should be charged on an hourly basis and never based upon a percentage of the assets being probated. Fiduciaries are often entitled to receive payment for their time and expenses in connection with their service to the estate. However, accurate records must be kept of the expenses incurred as well as the amount of time and its purpose for each day the fiduciary performs service for the estate.