Month: July 2014

Independent Administration in Probate-Smooth Sailing or Choppy Waters?

 

Filing a probate case can at times resemble a maze; one of forms, court rules, procedures and unfamiliar processes. Having an experienced probate attorney is paramount for administering a probate estate timely, efficiently and as smoothly as possible. Navigating the probate court while grieving the loss of loved one can be challenging but is necessary to settle the affairs of the family member who has passed.

California law allows for two types of probate administration, independent and dependent. As the name implies, independent administration is conducted by the personal representative (executor) of the estate with greater independence from the court, but still subject to supervision and oversight by the court for many aspects of the case. This is important as it allows the personal representative to perform many functions without obtaining court authorization, approval, or orders as is required if the personal representative is acting under a dependent administration.

A personal representative may petition the court for one of two types of authority of independent administration, full authority or limited authority. Full authority allows the representative to take all actions and exercise all powers under the probate code whereas a representative with limited authority may take all actions and exercise all powers under the probate code except the authority to sell real property, exchange real property, grant an option to purchase real property and borrow money that is secured with real property belonging to the estate.

As a safeguard and a check upon the personal representative acting under full authority the law requires that a notice a proposed action be given prior to taking action and that any interested party be afforded an opportunity to object prior to the action being taken. Examples of actions that require a notice of proposed action are selling or exchanging real property, selling or exchanging personal property, borrowing money, settling claims against real or personal property, investing money and selling a business or ongoing concern.

Examples of actions that generally do not require a notice of proposed action are listing real property for sale for up to 90 days, leasing real property for less than one year, selling perishable or depreciating property, selling securities, compromise of a claim against the estate, compromise of a debt owed to the estate and allowance or rejection of creditors claims. While a notice of proposed action may not be required in these cases often, due to strategic factors or others reasons a notice may be prudent to protect the personal representative from claims of unhappy beneficiaries or creditors.

While independent administration may lead to less court involvement it should not be assumed there would be less responsibility upon the personal representative. On the contrary, as there is less court involvement, the personal representative and their attorney must stay vigilant in performing their roles to ensure a smooth administration in a short timeframe as possible. Due to the nature of independent administration and the probate code sections authorizing it, the personal representative must careful in discharging their duties as to avoid running afoul of the strict requirements of the independent administration process.