Probate Essentials. Friday, July 20, 2018

Transcription

1 Probate Essentials Friday, July 20, 2018 presented by The South Carolina Bar Continuing Legal Education Division SC Supreme Court Commission on CLE Course No E

2 Probate Essentials Date: July 20, :30 a.m. Registration 9:00 a.m. Pre-Administration and Considerations in Opening the Estate Catherine H. Kennedy Turner Padget Graham & Laney, PA 10:00 a.m. Representing a Fiduciary: Ethics in Estate Administration Scott W. Hutto Hutto Law Firm, PA 10:30 a.m. Break 10:45 a.m. Estate Administration Catherine H. Kennedy Turner Padget Graham & Laney, PA 11:45 a.m. Lunch 12:15 p.m. Estate Administration (Continued) Catherine H. Kennedy Turner Padget Graham & Laney, PA 1:00 p.m. Post-Mortem Tax Issues Daniel Hicks Ingersoll & Hicks, PLLC 2:00 p.m. Break 2:15 p.m. Special Probate and Trust Situations J. Aaron Nelson, Jr. The Nelson Law Firm 3:30 p.m. Panel Discussion and Wrap-Up Probate 4:00 p.m. Adjourn (MCLE 6 hours; LEPR -.5 hours)

3 Basics of Probate Essentials SPEAKER BIOGRAPHIES (by order of presentation) Catherine H. Kennedy Turner Padget Graham & Laney, PA (course planner) Catherine Hood Kennedy is a certified specialist in Estate Planning and Probate Law, practicing with the firm of Turner Padget Graham & Laney, PA., in its Columbia office. Ms. Kennedy received her J.D. degree, cum laude, from the University of South Carolina School of Law. She is a past-chair of the Probate and Estate Planning Section of the Bar, is a fellow of the American College of Trust and Estate Counsel, is listed in Best Lawyers in America--Trust and Estates and Litigation-Trusts and Estates, and has been named a South Carolina Super Lawyer in Estate and Trust Litigation. From 1987 to 1999, she served as the Richland County Probate Judge. Ms. Kennedy frequently testifies before legislative committees on changes in South Carolina probate and trust law, and serves as an expert witness in probate matters. She served on the committee studying the Uniform Trust Code, which resulted in the enactment of the South Carolina Trust Code in 2005, and chaired the Bench/Bar committee that recommended the recent changes to the South Carolina Probate Code, which become effective in 2014 and She is the author of the chapter on estate planning in A Practical Guide To Elder And Special Needs Law In South Carolina. Ms. Kennedy has served in the South Carolina Bar s House of Delegates since 2002 and is presently a member of the Board of Governors of the Bar. Since 2000, Ms. Kennedy has been a South Carolina certified mediator and arbitrator. She was involved in drafting S. C. Probate Court Rule 5, which provides for mediation in the probate courts. She regularly assists with training new mediators in probate court mediation procedures. Scott W. Hutto Hutto Law Firm, PA (course planner) Scott W. Hutto is the sole shareholder of Hutto Law Firm, P.A., located in Georgetown, South Carolina. Scott practices in the areas of estate planning, probate administration, probate litigation and corporate planning. Scott received his B.A. degree, cum laude, from Wofford College in 1991 and his J.D. degree from the University of South Carolina in He is a member of the American Bar Association, the South Carolina Bar and the Georgetown County Bar. In 2005, Scott was

4 certified as a Specialist in Estate Planning and Probate Law by the South Carolina Supreme Court and was re-certified in Scott is also a Fellow of the American College of Trust and Estate Counsel (ACTEC). He has served two terms as a member of the Estate Planning and Probate Law Specialization Advisory Board, and he is a frequent speaker on the topics of estate planning and probate administration. Scott is active in his community and is Co-chair of Georgetown Bridge to Bridge ½ Marathon Committee and a board member of the Tidelands Community Hospice Foundation. Scott is a past board member of the following organizations: Probate, Estate Planning and Trust Section of the South Carolina Bar, Georgetown County Board of Education, Waccamaw Community Foundation, Friendship Place, Freedom for Kids Playground, Arial, A Ministry of Proclamation and All Saints Church, Pawleys Vestry. Before attending law school, Scott served four years as an Air Defense Officer in the United States Army. Scott has been married to his wife, Laura, for Twenty-six years, and they have two children. Daniel Hicks Ingersoll & Hicks, PLLC Daniel K. Hicks is a partner with Ingersoll & Hicks, PLLC in the Winston-Salem, North Carolina and Greenville, South Carolina offices. His principal areas of practice are Estate Planning, Tax, Estate Administration and Tax-Exempt Organizations. He is a member of the North Carolina and South Carolina Bars and is a member of the Estate Planning & Fiduciary Law Section of the North Carolina Bar and the Estate Planning Section of the South Carolina Bar. He received his B.A. and M.A. degrees from Bob Jones University and his J.D. degree from the University of North Carolina at Chapel Hill School of Law in 1997, with honors. He has served on the North Carolina Bar Legislative Committee for the Estate Planning section, and was a drafter of the North Carolina and South Carolina Uniform Trust Code. He is a past chair of the North Carolina Bar Estate Planning Section s Continued Legal Education committee and is currently a member of the North Carolina Bar Estate Planning Council and the South Carolina Estate Planning Council, as well as the American Bar Association s Tax-Exempt Organizations Section and CLE Committee. J. Aaron Nelson, Jr. The Nelson Law Firm J. Aaron Nelson, Jr. is a 2008 Cum Laude graduate of The Citadel, with a Bachelor of Science in Business Administration: Accounting. He then attended The Charleston School of Law where he received his Juris Doctor Magna Cum Laude in In 2012 he graduated from the University of Florida Levin College of Law with a Masters of Laws in Taxation. Mr. Nelson is the owner of The Nelson Law Firm of Bluffton, LLC and is of counsel at Merline & Meacham, P.A. in Greenville. He frequently speaks around the state on various estate planning, probate, trust, and tax topics. He has recently published two articles in the South Carolina Lawyer one article on trust decanting and another on individual retirement accounts.

5 His practice focuses predominantly on estate planning, probate administration, business formation and representation of clients before the Internal Revenue Service and South Carolina Department of Revenue. He and his wife, Elizabeth, live in Bluffton and have a daughter, Annie, and two English labs, Ashley and Cooper.

6 Probate Essentials Friday, July 20, 2018 Representing a Fiduciary: Ethics in Estate Administration Scott Hutto

7 Probate Essentials Friday, July 20, 2018 Estate Administration Catherine Kennedy

8 PROBATE ADMINISTRATION IN SOUTH CAROLINA Presented by Catherine H. Kennedy. Esq. Certified Specialist in Estate Planning and Probate Law TURNER PADGET GRAHAM & LANEY, PA Pre-Probate Safety deposit box Examined by Person named in court order Spouse Parent Adult descendent Executor named in copy of will Obtain Insurance policies by named beneficiary Will by named executor Deed to burial plot to requester Burial instructions to requester S.C. Code Section

9 Pre-Probate Named PR in Will may Protect property of the estate Carry out written instructions re disposition of body and burial arrangements Ratify acts of others Section Probate v. Non-Probate Assets NON PROBATE ASSETS Decedent WILL INTESTACY Beneficiaries PROBATE ASSETS 2

10 Considerations Prior to Administration 1. Alternatives to Full Administration Will Filed only (Form 306) No assets Will placed on record Will Probated only (Form 300) No assets Will actually declared valid Information provided to heirs and devisees (Form 305) Considerations Prior to Administration Small Estate Affidavit (Form 420) Net value of assets (deducting liens and encumbrances) is less than $25,000 No real property 30 days after death No application/petition for appointment of PR Assets delivered by possessor to successors Successor includes person paying funeral expenses Successors liable to PR or creditors 3

11 Considerations Prior to Administration 2. Ten year limitation for commencement of administration or probate ( ) Petition to determine heirs 3. Summary Administration--Sole Heir/Devisee = PR Consider renunciation of right to administer Consider disclaimers Consider private agreements under Considerations Prior to Administration 4. Formal Probate Summons and Petition Required Responsive pleading opposing probate required See ; Creditor claims Claims are barred after one year ( ) 4

12 Considerations Prior to Administration 6. Proof of Death See Section year absence presumption of death at the end of the period 7. Domicile County State Full Administration- Step 1 Deliver the Will and Have PR Appointed 1. Deliver original will to the court within 30 days from knowledge of death ( ) Persons who intentionally/fraudulently destroy, suppress or conceal or fail to deliver is liable for damages, and Persons, after being ordered to deliver will, are subject to penalty for contempt of court 5

13 Full Administration - Step 1 Deliver the Will and Have PR Appointed 2. Open the estate Proof of death Application/Petition (Form 300) Bond (Form 341) Not required if: PR named in Will PR is sole heir or devisee PR is Bank or trust company PR is State agency All heirs and devisees waive (Form 344) Filing fee $25 to $5,000 $45 to $20,000 $67.50 to $60,000 $95 to $100,000 Notice to creditors fee Full Administration - Step 1 Deliver the Will and Have PR Appointed 3. Give information to devisees and heirs (Form 305) 30 days from appointment Address is reasonably available Section File proof of delivery (Form 120) 6

14 Role of Personal Representative Duty to abide by terms of effective will and SC Probate Code Duty of impartiality to beneficiaries and creditors Duty to administer estate in accordance with rights of claimants, surviving spouse, minor or pretermitted children Duty to allow or disallow claims and to pay allowed claims Duty to act in best interests of successors to the estate Duty under federal and SC law to file returns Duty to take possession or control of decedent's property Duty to inventory and value probate property Role of Personal Representative Duty to provide list of nonprobate property within 90 days after demand by interested person (Form 327) Duty to take all steps reasonably necessary for management, protection and preservation of estate Duty to act in accordance with prudent investor act (Section ): "... Invest and manage assets as a prudent investor would by considering the purposes, terms, distribution requirements and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill and caution." Duty to settle and distribute estate expeditiously and efficiently consistent with best interests of estate 7

15 Role of Personal Representative Power to sell personal property valued $10,000 or less unless Will allows or court approves sale of property with greater value Power to sell real property if authorized in Will or court order Power to satisfy written pledges Power to enter into leases but not for a term extending beyond administration Power to access a catalogue of the decedent s electronic communications and to access the communications themselves if provided in the will (See new Title 62, Article 2, Part 10) Role of Personal Representative Power to retain assets owned by decedent, including those in which the PR is personally interested Power to distribute assets in kind Power to employ professionals, agents and advisors even if associated with the PR Power to insure assets and the PR Power to compromise obligations owing to the estate With court approval, power to effect compromises for WD, and claims surviving decedent s death 8

16 Full Administration - Step 2 Gather and Appraise Assets 1. Obtain certificates of appointment (Form 141) 2. Obtain tax identification number (IRS Form SS-4) 3. Open estate account 4. File Inventory and Appraisement (Form 350SF or LF) 90 days from appointment Assets owned on date of death Valued as of date of death Full Administration - Step 2 Gather and Appraise Assets Probate Assets: A - Real estate B - Stocks and bonds C - Cash and bank accounts D 1 - Life Insurance with no beneficiary F- Miscellaneous personal property I - Retirement accounts with no beneficiary G, H, I listed on I&A only if payable to the estate 9

17 Full Administration - Step 2 Gather and Appraise Assets Non-Probate Assets: D 2 - Life Insurance with beneficiary E JTROS property G - Lifetime transfers H Assets subject to a power of appointment I -- Retirement accounts with beneficiary Interested persons may request disclosure of non-probate property (Form 327); PR has 90 days to provide list of known nonprobate assets Full Administration - Step 2 Gather and Appraise Assets 5. Ancillary Administration Other county (nothing required by law) Other state 6. Determine what to do with assets Considerations set out in and Distribute Sell Court order needed? Retain 7. File decedent s final income tax return 10

18 Full Administration - Step 3 Determine and Pay Debts and Expenses 1. Notify creditors ( ) Must publish notice to creditors (Form 370) Once a week for 3 weeks Newspaper of general circulation in county Not required if PR appointed after 1 year from death May give written notification (Form 376) By mail By other delivery Full Administration - Step 3 Determine and Pay Debts and Expenses 2. Consider claims presented Is it proper? Valid liability Format (Form 371 REQUIRED) Writing Name and address of claimant Basis Amount claimed Filed with the court (required) Filed with the PR (optional) Not barred by statute of limitations Limitations period suspended for 8 months after death 11

19 Full Administration - Step 3 Determine and Pay Debts and Expenses Is it timely filed? Pre-death claims-- earlier of: 8 months from 1st publication (unknown) 1 year from date of death (known) 60 days from written notification but at least 8 months post-death claims-- 8 months after performance due by PR if contract 8 months after claim arises if other claim EXCEPT Secured creditors to extent of security Insured claims to extent of liability insurance PR, attorney or accountant claims for post death expenses Full Administration - Step 3 Determine and Pay Debts and Expenses 3. Allow or disallow claims (Form 372) by later of 60 days after presentment 14 months after date of death Allowance does not imply funds sufficient for payment Judgment in other court is an allowance; creditor must file judgment with probate court 12

20 Full Administration - Step 3 Determine and Pay Debts and Expenses 4. Pay allowed claims What priority? Administrative and funeral expenses Debts and taxes with priority under federal law Last illness medical, hospital and personal care expenses Debts and taxes with priority under State law including Medicaid General debts Full Administration - Step 3 Determine and Pay Debts and Expenses When to pay? Funds available Sale of real estate or personal property No later than 14 months from date of death What assets to use (abatement of assets)? Intestate property Residuary devises General devises Specific devises Non-probate property (accounts and trusts) 13

21 Full Administration - Step 3 Determine and Pay Debts and Expenses What amount should be paid? Pro-rata distribution if same class Allowed amount less value of security Allowed claims bear interest at legal rate (8.5% for 2018) beginning later of 14 months from death or last date to file claims, or per contract Contingent and Unliquidated claims must be addressed Offset allowed Personal liability of PR Full Administration - Step 3 Determine & Pay Debts and Expenses 5. File Estate Tax Return and pay taxes due No SC Estate Tax beginning 1/1/2005 Federal threshold $5,000,000 if death in 2011; $5,120,000 in 2012; $5,250,000 in 2013; $5,340,000 in 2014; $5,430,000 in 2015; $5,450,000 in 2016; $5,490,000 in 2017; $11,200,000 in 2018; File to elect portability 14

22 Full Administration - Step 3 Determine & Pay Debts and Expenses 6. File interim fiduciary income tax return (IRS Form 1041) if receipts exceed $600 and pay taxes due Consider 645 Election if Revocable Trust 6. If required to file Form 706, file Form 8971 and Schedule A with IRS and send out Schedule A to beneficiaries Basis Consistency Statute--IRC 1014(f) Reporting Requirements--IRC 6035 Basis Consistency Applicable if: Filing of Form 706 is required (not elective filings) Property receives stepped-up basis Property must increase estate tax liability--so marital & charitable deduction property is excluded from consistency requirement but not reporting 15

23 Exceptions to Form 8971 Cash Income in Respect of Decedent (IRD) Household & Personal Effects valued $3,000 Assets disposed of by estate Requirements Executor must File Form 8971 with IRS File Schedule A with IRS reporting basis of property on Form 706 and beneficiary receiving such property Send Schedule A to all persons who could receive property (including spouses and charities) Due 30 days after earlier of due date or date of filing 706 (10 months or 16 months from date of death) 16

24 Examples for Schedule A Executor must list asset beneficiary is going to/could receive Monetary Bequests if Executor can satisfy in kind Residuary Devises all assets that could be used to satisfy Pourover to Revocable Trust Schedule A goes to trustee not beneficiary Life Estate sent to life tenant & to remainder beneficiary as though life tenant died Errata No Supplemental Form 8971 required unless: Contingency happens & negates beneficiary s interest Unknown beneficiary later located New beneficiary identified Reported information is incorrect or incomplete (e.g., additional property discovered) 17

25 Effective Date Initially effective for Estate Tax Returns filed after 7/31/2015 IRS delayed implementation to June 30, 2016, so applies to returns filed 7/1/2016 and later Temporary & Proposed Regulations published 3/4/2016 Effective Date Initially effective for Estate Tax Returns filed after 7/31/2015 IRS delayed implementation to June 30, 2016, so applies to returns filed 7/1/2016 and later Temporary & Proposed Regulations published 3/4/

26 Effect of Law Basis is : value on 706; or as determined by IRS in audit; or as determined by agreement with IRS; or as determined by court proceeding (Post-death adjustments still applicable) If not reported, basis is $0 Beneficiary is subject to 20% penalty of under-reported gain Full Administration - Step 4 Distribute Property & Close the Estate 1. Distribute Real Estate File Deed of Distribution (Form 400) Original to ROD or Clerk of Court Copy of recorded deed to probate court Original recorded deed to devisee 2. Distribute Personal Property In-kind distribution preferred (Form 446) Value as of date of distribution Pecuniary bequests satisfied in kind should be fairly representative of appreciation /depreciation 19

27 Full Administration - Step 4 Distribute Property & Close the Estate 3. Obtain receipts 4. File final fiduciary income tax return (IRS Form 1041) and pay any taxes due Full Administration - Step 4 Distribute Property & Close the Estate 5. Summary Administration Closing (Form 421) Two Types Small Estate administration Net value is $25,000 or less plus Exempt property (up to $25,000) Costs and Expenses of administration Reasonable funeral expenses Necessary last illness expenses PR is sole heir or devisee (individually or as fiduciary) PR sends Form 421 to all unpaid creditors PR sends Form 421 and accounting to all distributees Estate remains open for 1 year from date of death 20

28 Full Administration - Step 4 Distribute Property & Close the Estate 6. Normal Closing Time Frame Later of: expiration of time for creditor to contest disallowance all proceedings on claims have ended 90 days from receipt of last estate tax closing letter Full Administration - Step 4 Distribute Property & Close the Estate 7. File closing documents Application for Settlement (Form 412) Accounting* (Form 361) Proposal for Distribution* (Form 410) Notice of Right to Demand Hearing* (Form 416) Proof of delivery (Form 120) indicating copies sent to interested persons Receipts (Form 401, 403) * can be waived by interested persons (Form 364) 21

29 Full Administration - Step 4 Distribute Property & Close the Estate 8. Obtain Order Closing Estate (Form 413) and Termination of Appointment (Form 414) These forms are court forms only and are not found on the SC Judicial Center website, where the probate forms are located: Subsequent Administration 1. After-discovered property 2. Property not fully administered Use Form 334-Application/Petition Form 350 SQA-I&A Form 337-Application for Settlement/Accounting 22

30 Catherine H. Kennedy. Esq. TURNER PADGET GRAHAM & LANEY PA PO Box 1473 Columbia, SC Main Street, Suite 1700 Columbia, SC Fax

31 Estate Administration Procedures/Probate Court Forms I. Filing/Probating of Will A. Filing of Will for Record (Form 306ES) just provides information B. Application for Informal Probate (Form 300ES) actually declares Will valid II. Small Estates (less than $25,000)- See A. Complete Affidavit for Collection of Personal Property (Form 420ES) B. Submit any other documentation requested C. Probate Court will complete Order D. Affidavit is presented to person in control of assets belonging to the decedent who should distribute those assets in accordance with the Court s Order III. Normal Estate Administration A. Opening the Estate 1. Complete Application for Informal Probate/Appointment (Form 300ES) [This form is also used for a Petition for Formal Testacy and Appointment. A Summons (Form SCCA 401PC) should be attached to a Petition] a. Indicate in Paragraph 4a the named beneficiaries under the Will b. Indicate in Paragraph 4b the names and addresses of Decedent's heirs who were not included in the Will c. Answer remaining questions d. Sign verification and have notarized e. Sign Acceptance on Page 6 if seeking appointment 2. Attach original Will and original Death Certificate to Application 3. Include Fees: a. Based on total amount of probate assets, i.e., 20,000-60,000 = $67.50; 60, ,000 = $95; $100,000 + = $95 plus 1.5 Percent of amount over $100,000 up to 600, % of amount over $600,000 - confirm with Probate Court amount requested initially. b. Publication fee - check with Probate Court 1

32 4. Include Fiduciary Bond (Form341ES) or Waiver of Bond (Form 344ES) if Intestate Estate [Handbook for Probate Practitioners published by the Probate Section of the SC Bar may be helpful in determining the requirements of each probate court.] 5. Probate Court issues Fiduciary Letters and Certificates of Appointment (Form 141ES) to evidence the appointment of the Personal Representative 6. Newspaper publishes Notice to Creditors once a week for three weeks and files Certificate of Publication (Form 370ES) with Probate Court B. Complete IRS Form SS-4 to obtain a tax identification number for the estate C. Information to Heirs and Devisees (Form 305ES) 1. Complete form after Application is granted 2. Consider whether to write letter to accompany form/include Will 3. Mail form to all to people listed in 4(a) and 4(b) in the Petition 4. File with Probate Court as attachment to Proof of Delivery (see below). D. Proof of Delivery (Form 120PC) 1. Complete form, sign and have notarized 2. Attach a copy of form that was delivered/sent 3. File with Probate Court. E. Inventory and Appraisement 1. Determine whether to use the short form (Form 350ES-SF) or the long form (Form 350ES-LF) 2 Insert values and assets as of date of death 2. Complete form, sign and have notarized 3. File with the Probate Court 4. Provide a listing of known non-probate property within 90 days of demand by an interested person (Form 327) and file Proof of Delivery with probate court (Form 125) 2

33 F. Deal with Creditors 1. Provide Written Notice to Creditors (Form 376ES) to shorten claims period 2. Creditors file with the probate court a Statement of Creditor s Claim (Form 371ES), which is now a mandatory form 3. PR must allow or disallow all claims in whole or in part by sending Notice of Allowance/Disallowance Of Claim (Form 372ES) to the creditor and filing a copy with a Proof of Delivery (Form 120PC) with the Probate Court 4. Obtain Release/Satisfaction of Claim (Form325ES) and file with probate court; other forms of proof can be used G. Transfer Real Estate 1. Complete Deed of Distribution (Form 400ES) by inserting the distributee and the legal description 2. File original with Register of Deeds/Clerk of Court (depends upon the county) with filing fee of $10 5. File copy of recorded deed with Probate Court H. Transfer Personal Property 1. Complete Bill of Sale (DMV Form 4031) and reverse side of Certificate of Title for vehicles and mobile homes. Provide a Certificate of Appointment to the distributee 2. Distribute personal property (Form 446ES) and assign Receivables 3. Obtain Receipt (Form 401ES or 403ES) H. Accounting (Form 361ES) 1. Interim Accounting may be needed if estate is open longer than one year 2. Complete form, sign and have notarized 3. File original with Probate Court 4. Mail a copy to all people listed in 4(a) and possibly 4(b) in the Petition 3

34 3. File Proof of Delivery with Probate Court I. Closing Estate Under Summary Closing Procedure Under (b) 1. File Verified Statement to Close Estate (Form 421ES) with Probate Court a. Personal Representative is sole beneficiary or sole heir--no Accounting required b. Net Probate Estate = $25,000 + exempt property ($25,000) and priority claims (costs of administration, funeral expenses and expenses of last illness) Accounting required 2. Send Verified Statement and Accounting to Interested Parties, if any 3. File Proof of Delivery with Probate Court J. Closing Estate Under Normal Procedure 1. Complete and file the Application for Settlement (Form 412ES) with the Probate Court 2. Complete and file the following unless waived by all the interested parties (Form 364ES is the waiver of the filing requirement): a. Final Accounting (Form 361ES) b. Proposal for Distribution (Form 410ES) if assets still remain in estate c. Notice of Right to Demand Hearing (Form 416ES) if all interested persons have not waived a hearing (Interested persons can demand a hearing by using Form 113) 3. Complete and file the Proof of Delivery (Form 120ES) for all forms sent 4. File Receipts (Form 401ES or 403ES) or other evidence of transfer of assets to distributees 5. Submit other documents requested by Probate Court 6. Probate Court issues Order Closing Estate (Form 413ES) and Termination of Appointment (Form 414ES) 7. Make certain order releases any bond and send order to bonding entity 4

35 IV. Reopening Estate A. Application for Subsequent Administration (Form 334ES) [This form is also used for a Petition for Subsequent Administration if the proceeding must be formal. A Summons (Form SCCA 401PC) should be attached to a Petition] B. Complete Subsequent Administration Inventory (Form 350ES SQA) C. Transfer assets and provide proof to Probate Court D. File Application for Settlement & Accounting of Subsequent Administration (Form 337ES) E. Probate Court issues Termination of Appointment (Form 414ES) 5

36 Estate Administration Procedures/Probate Court Forms I. Filing/Probating of Will A. Filing of Will for Record (Form 306ES) just provides information B. Application for Informal Probate (Form 300ES) actually declares Will valid II. Small Estates (less than $25,000)- See A. Complete Affidavit for Collection of Personal Property (Form 420ES) B. Submit any other documentation requested C. Probate Court will complete Order D. Affidavit is presented to person in control of assets belonging to the decedent who should distribute those assets in accordance with the Court s Order III. Normal Estate Administration A. Opening the Estate 1. Complete Application for Informal Probate/Appointment (Form 300ES) [This form is also used for a Petition for Formal Testacy and Appointment. A Summons (Form SCCA 401PC) should be attached to a Petition] a. Indicate in Paragraph 4a the named beneficiaries under the Will b. Indicate in Paragraph 4b the names and addresses of Decedent's heirs who were not included in the Will c. Answer remaining questions d. Sign verification and have notarized e. Sign Acceptance on Page 6 if seeking appointment 2. Attach original Will and original Death Certificate to Application 3. Include Fees: a. Based on total amount of probate assets, i.e., 20,000-60,000 = $67.50; 60, ,000 = $95; $100,000 + = $95 plus 1.5 Percent of amount over $100,000 up to 600, % of amount over $600,000 - confirm with Probate Court amount requested initially. b. Publication fee - check with Probate Court 1

37 4. Include Fiduciary Bond (Form341ES) or Waiver of Bond (Form 344ES) if Intestate Estate [Handbook for Probate Practitioners published by the Probate Section of the SC Bar may be helpful in determining the requirements of each probate court.] 5. Probate Court issues Fiduciary Letters and Certificates of Appointment (Form 141ES) to evidence the appointment of the Personal Representative 6. Newspaper publishes Notice to Creditors once a week for three weeks and files Certificate of Publication (Form 370ES) with Probate Court B. Complete IRS Form SS-4 to obtain a tax identification number for the estate C. Information to Heirs and Devisees (Form 305ES) 1. Complete form after Application is granted 2. Consider whether to write letter to accompany form/include Will 3. Mail form to all to people listed in 4(a) and 4(b) in the Petition 4. File with Probate Court as attachment to Proof of Delivery (see below). D. Proof of Delivery (Form 120PC) 1. Complete form, sign and have notarized 2. Attach a copy of form that was delivered/sent 3. File with Probate Court. E. Inventory and Appraisement 1. Determine whether to use the short form (Form 350ES-SF) or the long form (Form 350ES-LF) 2 Insert values and assets as of date of death 2. Complete form, sign and have notarized 3. File with the Probate Court 4. Provide a listing of known non-probate property within 90 days of demand by an interested person (Form 327) and file Proof of Delivery with probate court (Form 125) 2

38 F. Deal with Creditors 1. Provide Written Notice to Creditors (Form 376ES) to shorten claims period 2. Creditors file with the probate court a Statement of Creditor s Claim (Form 371ES), which is now a mandatory form 3. PR must allow or disallow all claims in whole or in part by sending Notice of Allowance/Disallowance Of Claim (Form 372ES) to the creditor and filing a copy with a Proof of Delivery (Form 120PC) with the Probate Court 4. Obtain Release/Satisfaction of Claim (Form325ES) and file with probate court; other forms of proof can be used G. Transfer Real Estate 1. Complete Deed of Distribution (Form 400ES) by inserting the distributee and the legal description 2. File original with Register of Deeds/Clerk of Court (depends upon the county) with filing fee of $10 5. File copy of recorded deed with Probate Court H. Transfer Personal Property 1. Complete Bill of Sale (DMV Form 4031) and reverse side of Certificate of Title for vehicles and mobile homes. Provide a Certificate of Appointment to the distributee 2. Distribute personal property (Form 446ES) and assign Receivables 3. Obtain Receipt (Form 401ES or 403ES) H. Accounting (Form 361ES) 1. Interim Accounting may be needed if estate is open longer than one year 2. Complete form, sign and have notarized 3. File original with Probate Court 4. Mail a copy to all people listed in 4(a) and possibly 4(b) in the Petition 3

39 3. File Proof of Delivery with Probate Court I. Closing Estate Under Summary Closing Procedure Under (b) 1. File Verified Statement to Close Estate (Form 421ES) with Probate Court a. Personal Representative is sole beneficiary or sole heir--no Accounting required b. Net Probate Estate = $25,000 + exempt property ($25,000) and priority claims (costs of administration, funeral expenses and expenses of last illness) Accounting required 2. Send Verified Statement and Accounting to Interested Parties, if any 3. File Proof of Delivery with Probate Court J. Closing Estate Under Normal Procedure 1. Complete and file the Application for Settlement (Form 412ES) with the Probate Court 2. Complete and file the following unless waived by all the interested parties (Form 364ES is the waiver of the filing requirement): a. Final Accounting (Form 361ES) b. Proposal for Distribution (Form 410ES) if assets still remain in estate c. Notice of Right to Demand Hearing (Form 416ES) if all interested persons have not waived a hearing (Interested persons can demand a hearing by using Form 113) 3. Complete and file the Proof of Delivery (Form 120ES) for all forms sent 4. File Receipts (Form 401ES or 403ES) or other evidence of transfer of assets to distributees 5. Submit other documents requested by Probate Court 6. Probate Court issues Order Closing Estate (Form 413ES) and Termination of Appointment (Form 414ES) 7. Make certain order releases any bond and send order to bonding entity 4

40 IV. Reopening Estate A. Application for Subsequent Administration (Form 334ES) [This form is also used for a Petition for Subsequent Administration if the proceeding must be formal. A Summons (Form SCCA 401PC) should be attached to a Petition] B. Complete Subsequent Administration Inventory (Form 350ES SQA) C. Transfer assets and provide proof to Probate Court D. File Application for Settlement & Accounting of Subsequent Administration (Form 337ES) E. Probate Court issues Termination of Appointment (Form 414ES) 5

41 Probate Essentials Friday, July 20, 2018 Post-Mortem Tax Issues Daniel Hicks

42 Probate Essentials Friday, July 20, 2018 Special Probate and Trust Situations J. Aaron Nelson, Jr