If you have been given the important role of being a personal representative of the estate of a loved one, you have many duties and responsibilities ahead of you. As the impartial representative of everyone who has an interest in the estate, it is your job to take possession of the property of the estate and distribute it pursuant to the terms of the will or the laws of intestate succession in California. Knowing how to distribute assets to beneficiaries will help you understand what will be expected of you, as you fulfill this important role.
First things first . . .
Once the assets of the estate have been collected, the legitimate debts have been paid, the necessary tax returns filed and taxes paid, and the account prepared, it is time to distribute the assets that remain to the beneficiaries. Before the estate is closed, you must file a Petition for Final Distribution, which must include an accounting, a report of administration and a petition for court approval. The report of administration is a complete summary of all actions taken by you, the representative, in narrative form. The petition is a request to the Court to approve the accounting, the distribution of the assets and any other matters that may require approval.
Determine who the beneficiaries are
Based on either the terms of the will, or California’s laws of intestate succession, you must determine who all of the beneficiaries will be. The petition is very comprehensive, and must include all relevant information about the property remaining on hand to be distributed, and the names, addresses and relationships of the beneficiaries who are to receive property. If any property is to be distributed to a minor, the minor’s birthdate must be included in the petition.
Avoid common pitfalls in administering an estate
There are many common mistakes that are made by personal representatives who are not familiar with the probate process and the extent of the duties and responsibilities they have been given. Specifically, there are a number of mistakes made in the preparation of the final account, report and petition for final distribution. Some mistakes involve not using the proper format, as required by the local rules of the court where the estate is being probated. Other mistakes involve mathematical errors in the accounting, such as starting with the incorrect amount, not itemizing income or identifying the source of the income.
Be specific and provide clear details
It is important to itemize all disbursements to creditors, accurately describe the assets remaining on hand for distribution, and provide proper legal descriptions for any real property. Also, the failure to designate intestate heirs, if applicable, along with their relationships, can cause problems as well. If necessary, any percentage shares for multiple beneficiaries must include computations and the accurate amounts to be distributed to each beneficiary.
Account for all activity involving creditors
It is very important to include information on all activity relating to creditors, including a listing of all legitimate claims and the disposition of those claims. In the event the estate is insolvent (meaning there are insufficient assets to satisfy all debts), you must provide an itemization of all creditors’ claims, showing the class to which each belongs, and the proper proration of remaining assets among creditors. A list of any payments of debts for which no claim is filed, must also be provided. There are many other duties and responsibilities that must be fulfilled by a personal representative. Consult your probate attorney for assistance.
If you have questions regarding distribution of assets, or any other probate or estate planning needs, please contact the Schomer Law Group either online or by calling us at (310) 337-7696.