Probate In Real Life III: Rights Against Beneficiaries

January 18, 2011
300px 031030 F 2828D 166 screen1 Probate In Real Life III: Rights Against Beneficiaries

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Today, we continue our discussion of probate and the executor’s duties.  In Part I, we discussed what happens if a named executor does not want to serve.  In Part II, we discussed inventories, the executor’s duty to control the estate’s assets, and the potential for the estate representative to suffer personal liability.  In this post, we will discuss what happens if the beneficiaries take assets before they are authorized to do so, and what remedies a landlord may have if a renter dies during the lease term.

Beneficiaries Taking Assets Before Authorized

Are you a beneficiary of a will?  Do you want to take property before the executor or the state gives it to you?  Don’t.  Doing so will possibly subject you to civil penalty.

Most state procedures are generally the same.  Once an executor or personal representative is appointed, this person has the right to possess and control all estate assets, including those taken before the appointment.  Virginia law even specifically states that the personal representative can make a claim against a beneficiary for “taking or carrying away” any estate assets prematurely.

Maryland and Pennsylvania statutorily protects certain heirs.  In Maryland, if an heir already holds property to which she is entitled, she only needs to give it back if the representative reasonably needs it for valuation or other purposes.  In Pennsylvania, an heir occupying any real estate with the decedent’s permission may stay.

What does all of this mean? — You do not have a right to any of the decedent’s property until it is released to you by the estate representative.  If you take any property before this time, even if no representative has been named, you will be subject to civil suit.

While in real life, you can attempt to work something out with the representative, it is much better to establish an open line of communication, keep clear records of what you have taken, or at the very least, try to establish a value of the property that you took.

Estate Creditors’ Rights

All creditors are entitled to notice of the decedent’s death and probate. Too many times, beneficiaries will attempt to avoid paying estate debts to creditors under justifications such as “the credit card company is so big, it won’t miss this $3,000” or “the landlord was a jerk, so he doesn’t deserve his two month’s rent”.  Unfortunately, such arguments are rarely convincing to a court.  Instead, just about the only time a debt is released is when the estate’s liabilities exceed its assets.

Landlord’s Claims for Lost RentA landlord owed rent is an estate creditor.  If a renter dies in the middle of a rental term, any terms stated in the rental agreement will rule what the landlord may claim against the estate.  If the lease is silent, then state law governs.  In most states, death does not end the lease – the renter’s estate will still owe the landlord through the end of the term.  However, the landlord must do his or her best to find a new tenant during this period to limit (or “mitigate”) the debt.

Differing state laws covering the landlord’s specific rights to re-enter the property, to keep, store, or sell off renter’s personal property, and the notice required to terminate the lease are beyond the scope of this post.  However, be aware that your state does protect the landlord in these or other ways.

In practice, your best course as personal representative (or beneficiary) is to keep an open line of communication with the landlord so that the estate does not suffer any unnecessary damages.

 Probate In Real Life III: Rights Against Beneficiaries
 Probate In Real Life III: Rights Against Beneficiaries

Scott

Scott R. Zucker, Esq. is the owner of The Zucker Law Firm PLLC, located just outside the Capital Beltway in Annandale, within five miles of the City of Fairfax, the county seat of beautiful Fairfax County, Virginia. The firm focuses mainly on estate planning services for Virginia, Maryland and Pennsylvania clientele, and seeks to do so in an affordable and approachable way. People interested in learning more can contact Scott by phone or email.

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4 Responses to Probate In Real Life III: Rights Against Beneficiaries

  1. Laurel
    December 20, 2011 at 2:05 pm

    Good day! This is my 1st comment here so I just wanted to give a quick shout out and tell you I really enjoy reading your articles. Can you suggest any other blogs/websites/forums that cover the same subjects? Thanks a ton!
    Laurel recently posted..bed bath and beyond promo code

    • Scott
      January 5, 2012 at 4:00 pm

      Sure! I have a “Favorite Estate Planning Sites” tab listed above. Click there for my favorites.

      Thank you for commenting!

      Scott

  2. September 26, 2012 at 8:51 pm

    At what point does the state step in when the executor has done nothing to what is stated in the will. At one point does the beneficiary get the interest bank statements? The house was in my father’s name at this point 3 years later the attorney who is to make sure the estate is followed has not provided even the real estate appraisal.
    Perhaps it should be addressed with the bar association as well? Any suggestions? (live in Pennsylvania)

    • Scott
      October 3, 2012 at 4:48 pm

      At 20 Pa.C.S.A. § 3182 (as of the date of this response, current through 2012 Regular Session Act 143), Pennsylvania lists several grounds for removing a personal representative from the position. By no means is this a complete list of issues to consider, but you might start here as a guideline. In any event, you would probably need to initiate any action; you would first call the local probate court and ask what procedures are required to open a claim against the personal representative / attorney.

      In your case, removal is not impossible, but you would have to prove to the court that the personal representative has breached his / her duty to the estate through the 3 year delay. This would be harder if, say, the property has increased in value since your father’s death.

      It is unclear from your facts whether or not the attorney is the actual personal representative of your father’s estate. To be clear, if he / she is not in fact the personal representative, the above-referenced section of the Pennsylvania Statutes would apply for removing whoever is currently serving as the personal representative.

      I would suggest that you take on one battle at a time. Your issues seem to be 1) you want the probate process to be finished so your father’s estate can finally be distributed; and 2) it is taking far too long — you need to decide which issue is more important. If finishing the process is more important than punishing the attorney, then I would call the local probate court and also talk to the personal representative and/or attorney to find out the reasons for the delay. If going after the attorney is more important than closing the estate, then you should pursue that route (although I suspect that you’d rather just have the whole thing over with).

      The point is that doing both at the same time would most likely create further delays and expenses.

      Let me know if you have any further questions.

      Take care,
      Scott

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