Probate: Do I have to?

Probate: Do I have to?

With a surprising degree of frequency I meet with clients to initiate the probate process many years after the death of a loved one. Often the catalyst is an attempt to sell a piece of real estate, at which time they learn that they have no authority to sell because dad’s estate or grandma’s estate was never probated. As many Bermudian families try hard to keep properties within the family, and as many families have a number of pieces of real estate, it can be years before this discovery is made. Then, the whole sale process comes to a grinding halt.

Essentially, a grant of representation (which is called a “Grant of Probate” where there is a will and a “Grant of Letters of Administration” where the deceased died, “intestate” (without a will)) is a court-issued proof of the personal representative’s authority to deal with the deceased’s assets. A Grant is always required to transfer real estate and unless the balances are nominal, will also be required to transfer the proceeds of bank accounts and shareholdings. The most common situation in which a Grant will not be required is that in which the deceased held everything jointly with a spouse or child. In that case, all property passes to the survivor by law.

The probate process can be very straightforward in circumstances where the deceased left a will and had simple and easily ascertained assets and liabilities. It can be quite complex where the deceased died intestate and had assets in multiple jurisdictions, or where the deceased’s will is contested. This is why it is difficult for a lawyer assisting in the application to ascertain the likely time commitment and costs of the process until well into it. No two estates are exactly alike. On average, when the Bermuda Supreme Court is operating at full capacity, the process will take six to nine months. Regrettably, the Bermuda Supreme Court is currently running at least nine months behind schedule, so applications are gridlocked and it is anyone’s guess as to how long it will take.

Technically, the personal representative’s duties commence from the deceased’s death. The family, who may or may not have found or reviewed the will, usually deal with reporting the death, arranging the funeral and obtaining death certificates. They will also, generally secure the deceased’s assets. All of these tasks are the responsibility of the personal representative, the “executor” (if there is will) and the “administrator” (if there is no will) and so it is important to determine whether or not the deceased left a will as soon as possible after his or her death and, if not, to ascertain who will be acting as statutory administrator.

It is at this point that most families seek out the help of a lawyer. The probate process can be undertaken by an individual and really should be if the estate has no real property and is worth less than $50,000 (a “small estate”). In these circumstances, a personal representative can seek out the aid of the Supreme Court directly. However, in most cases, it is too overwhelming a responsibility to tackle without professional assistance.

The personal representative will need to gather together as much of the deceased’s personal and financial documentation as can be located, a task which has grown substantially more difficult in the digital age, where the deceased may not have maintained paper records. Documents which are required as part of the probate process include the original will (if any), death certificate, primary family homestead certificate for real estate (if there is one) and birth certificates and/or marriage certificate of the personal representative(s), depending on his or her or their relationship to the deceased. Valuations and/or appraisals may also be required depending on the nature of the deceased’s assets.

Where no will can be found or where deeds to real estate are missing, your lawyer will conduct a will and deed search as a first order of business. As a routine task, he or she will also seek confirmation of the deceased’s assets and liabilities from the local banks and any other entities with which the deceased had interests; prepare documentation to apply for a primary family homestead certificate (if needed); place notices for creditors, kin (in the case of a male decedent) and of intention to apply for letters of administration (where there is no will), have real estate and other significant assets valued or appraised; and will then draft the Oath and Affidavit of Value to which the personal representative(s) will swear and then file the entire application with the Supreme Court.

After the Grant has been issued, bank accounts will be called in and, from the deceased’s assets, stamp duty, the deceased’s debts, funeral, testamentary and administration expenses will be paid. The balance of the deceased’s personal estate will be distributed, and real estate vested, in accordance with the will, or the laws governing intestacy as the case may be. The personal representative is under an obligation to prepare a final accounting of the deceased’s estate.

The above description is intended to provide a snapshot of the probate process. It is by no means comprehensive. Complexities not touched upon in this blog include, but are by no means limited to, the special considerations arising where the deceased had an unincorporated business, an executor does not wish to act, the will has been lost or tampered with or contains an error, and where there are assets abroad.

As Benjamin Franklin once said: “In this word nothing can be said to be certain, except death and taxes.” That said, it is good to be prepared and a little knowledge goes a long way.