We often hear that “Probate” is something we want to avoid. But what is “probate”?
The short version is that probate is the process of gathering the assets of the Decedent, paying Decedent’s creditors and Taxes, and then distributing the remaining assets to the people chosen by Decedent. The process is started by “probating” the Will, or having the Executor present the Will to the Register of Wills. The Executor is then appointed by the Register of Wills, and then assumes the power and responsibility to oversee this process.
“Settling the Estate” occurs when the Executor believes all tasks are complete. At that time, to protect Executors that we represent, we recommend that Executors distribute funds only after receiving Releases from all beneficiaries for all actions taken by the Executor. By executing proper Releases, the beneficiaries are then barred from making later claims.
If beneficiaries refuse to sign a Release, we then advise our clients to file a Formal Accounting. Accountings follow a specific format, describe all actions taken by the Executor, and are filed with the Orphans’ Court for approvals. The beneficiaries receive a notice and are free to object. If they do not object, then the Judge will approve the Formal Accounting and release the executor from liability. If the beneficiaries do file objections, then the Judge hears them. Should the Judge agree with objections or find issues with Accounting, then the Judge can order changes to the Accounting or surcharge the Executor for any damages caused by the Executor. Either way, the Executor can then move on, knowing the Estate is “closed”.
Do I Have To Serve As Executor?
No one can force you to serve as executor. If a Will names you executor, you can choose not to by “renouncing.” Renounce means “no thank you.” If you do renounce, the Will may name an alternate or successor Executor. If no successor is named, the court appoints a successor. If you renounce, you have not taken on any personal responsibility. It is common for someone to renounce when an estate has many creditors or there are difficult assets to sell or the estate faces litigation.
Once you do accept the position, you are a fiduciary. You owe the beneficiaries a duty to protect, preserve, and maximize the estate. If you fail to act in the best interests of the beneficiaries, then a judge could hold you personally responsible.