WAIVER OF INVENTORY AND APPRAISEMENT

August 10, 2010 § 3 Comments

[This information comes from the outline of a presentation made by Bob Williford to the Chancery Judges Spring Conference earlier this year.  Used with  his permission.]

Intestate Estates:

  • The goods and personal estate shall be inventoried unless the court or clerk “for good cause,” not require that it be filed.  § 91-7-109, MCA.
  • If appraisement is not required, an inventory pursuant to § 91-7-93, MCA, shall be made within 90 days of the issuance of Letters of Administration.
  • If personal property not included in the original inventory comes into possession of the Administrator, a supplemental inventory describing those items shall be returned within 30 days.  § 91-7-95, MCA.
  • An Administrator who fails to file a timely inventory may be removed.  §91-7-105, MCA.  

Testate Estates:

  • Inventory may be waived “for good cause” under § 91-7-109, MCA, or if the Executor is a residuary legatee under § 91-7-43, MCA. 
  • Although the statutes do not expressly provide that inventory can be waived by the Will of the testator, it is common practice for the court to recognize the request.  Perhaps the “good cause” exception is broad enough to allow waiver of the requirement by the Will.  § 91-7-109, MCA.

DUTIES OF THE ATTORNEY IN PROBATE MATTERS

August 9, 2010 § 2 Comments

Not too long ago, during a proceeding involving a minor’s settlement, the following exchange took place between a veteran lawyer (who practices primarily in Circuit Court) and me:

Judge:  Your claim for attorney’s fees has to be supported as set out in Rule 6.11.

Lawyer:  I am sorry, your honor, I was not aware of your local rules.

Judge:  That is not a local rule; it is the Uniform Chancery Court Rule.

Lawyer:  When were uniform chancery rules adopted?

If ignorance is bliss, that is one happy lawyer.

Sometimes I feel that even lawyers who are fully aware of the Uniform Chancery Court Rules (UCCR) have no idea what they include because they do not bother to read them.  Take the requirements for lawyers in probate matters.  From time to time, I have to remind lawyers of their duties, and when I do it often happens that they are surprised to learn of it.  Could it be that lawyers nowadays are just too busy to familiarize themselves with the law?  Now that’s a scary thought.

My best advice is to get out your rule book and read UCCR 6.01 – 6.17 right now.

Okay, I know you’re too busy to do it right now, so here is an overview:

  • Rule 6.01 requires that every fiduciary must have an attorney unless the fiduciary is licensed to practice law.  The attorney’s compensation will be fixed by the Chancellor, and the attorney may not withdraw unless permitted to do so by the Chancellor.  As a practical matter, you will not be allowed to withdraw unless and until an attorney takes your place, so you need to think twice before entering an appearance in a probate matter. 
  • Rule 6.02 expressly states that “Every fiduciary and his attorney must be diligent in the performance of his duties.  They must see to it that …” publication to creditors is promptly made, inventories and accounts are timely filed and presented, all other statutory requirements are timely and properly met, and that ” … estates of decedents are completed and assets distributed as speedily as may be reasonably possible.”  In plain English, that means that the lawyer is every bit as responsible to the court as is the fiduciary.  Your professional standing, reputation with the court, and even your license in some cases, are on the line.  It also means that estates are not to be kept open for years while the attorney deals with other matters.
  • Rule 6.02 also provides as to guardianships and conservatorships that the attorney shall report promptly to the court a guardian’s or conservator’s failure to perform his or her duties, and if the lawyer fails to do so, the lawyer may be held in contempt.
  • Rule 6.03 requires that every accounting must include a statement of all assets of the estate.  For money, bonds or securities, a computer printout is not adequate; the accounting must include a sworn certificate by an officer of the bank that the funds are actually on deposit in the amount claimed. 
  • Rule 6.04 is perhaps the most overlooked of all, but it is perhaps also the most crucial.  It requires that every disbursement be accompanied by a voucher in the form required by §91-7-279 and 93-13-71, MCA.  It is not enough to recite in the accounting, for example, that “The guardian spent $50 on clothes for the ward as authorized by the court in the last accounting.”  The accounting must include vouchers documenting the expenditure.  In reporting the expenditures, Rule 6.05 mandates that where the expenditures are spelled out in the accounting, the voucher number, date of the disbursement, name of the payee, purpose of the expenditure, and date of any court order authorizing the payment must be stated.
  • Rule 6.06 spells out how to deal with lost vouchers.
  • Rule 6.07 states that claims arising after death of the decedent such as for funeral bills, monuments and attorney’s fees, must be approved by the court before payment.
  • Any request for funds for support of a ward must include the present amount of the estate, the amount of the ward’s income, and the amount of any previous allowance, according to Rule 6.08.  Any request to expend funds for necessities that are the responsibility of the parent will not be approved unless the guardian justifies the request under oath.
  • Rule 6.10 deals with settlement of wrongful death or injury claims.  An outline for handling minor’s settlements is here.
  • Rule 6.11 sets out the required information to support a claim of the fiduciary for a commission or extraordinary compensation, which includes the total amount of the estate handled, the total amount disbursed, the balance on hand, the nature and extent of services rendered, the expenses incurred by the fiduciary, and the total amount of any amount previously allowed.  The rule also states that neither fees for fiduciaries nor for attorneys shall be based on the value of any real property.
  • Rule 6.12 governs petitions for attorney’s fees.  The attorney must support the request with the same information required of a fiduciary as in Rule 6.11, and an itemized statement of services rendered.  There are separate requirements for recovering damages for wrognful death or personal injury, and where a contingent fee contract has been approved.
  • Rule 6.13 requires that the fiduciary swear to and sign every pleading, accounting and report.  It is not adequate, as sometimes happens, that the attorney sign the documents.
  • Rule 6.14 provides that a copy of the will must be attached to the petition to open the estate.  Recently a lawyer (from out of town) argued with the clerk that the rule means that only a copy needs to be submitted, and that he should retain the original.  That is not the meaning of the rule, and it is not the law.  § 91-7-31, MCA, requires that the original will, when admitted to probate, shall be recorded and retained by the clerk.  The rule merely requires that a copy of it be attached to the petition for ready reference by the court and other interested parties, and so that the original can be secured.
  • Finally rule 6.17 bears stating verbatim:  “If, without cause, an attorney fails to file accountings or other matters in probate cases (estates, guardianships and conservatorships) after being so directed in writing by the Court, the Court may consider such misconduct contempt.”  Misconduct; such a meaningful, menacing word fraught with professional peril.

Practice Tip:  Quit relying on forms to do everything and start reading the rules.  I repeat:  Start Reading The Rules.  You stake your career on your performance; start staking your performance on knowledge of what you are doing.  You have a professional duty to your client to know the law, to inform, advise and guide your client, and to keep your client as well as yourself in compliance.  As the attorney in a probate matter the rules make it clear that you will be held every bit as responsible as the fiduciary when things go wrong.  The fiduciary, however, seldom has a law license and career on the line like you do.

SALE OF REAL PROPERTY IN AN ESTATE

July 21, 2010 § 6 Comments

[This information comes from the outline of a presentation made by Bob Williford to the Chancery Judges Spring Conference earlier this year.  Used with  his permission.]

Vesting of title.

Real property vests directly in the heirs in an intestacy.  Parker v. Newell, 245 So.2d 575 (Miss. 1971).  It vests in the devisees in a testate estate.  Anderson v. Gift, 126 So. 656 (Miss. 1930).  Also See, In Re Estate of McRight, 766 So.2d 48 (Miss. App. 2000).

Abatement.

Even though the real property passes directly to the heirs or devisees, and not into possession of the Administrator or Executor (unless the Executor is directed by the will to sell the real property), it is subject to the claims of creditors and payment of estate expenses.  The rules of abatement govern the order in which assetss of the estate must be first applied to such claims and expenses.  Gordon v. James, 39 So. 18 (Miss. 1905); §§ 91-7-91 and -191, MCA.

Authority to sell real property.

When a petition to sell real property to pay debts is filed, all parties interested shall be cited by personal summons or publication.  § 91-7-197.  The burden of proof is on the petitioner to show that the land must be sold in preference to the personal property.  Brown v. McAfee, 421 So.2d 1061 (Miss. 1982); Blum v. Planters’ Bank & Trust Co., 122 So. 784 (Miss. 1929).  In such instances the Executor or Administrator would generally be the petitioner.

A will may grant the Executor the express authority to sell the real property.  Glidewell v. Pannell, 130 So.2d 288 (Miss. 1930).  If the Executor under the will is specifically instructed to sell the real property, there is no requirement for court approval.  Davis v. Sturdivant, 19 So.2d 499 (Miss. 1944).    

Execution of the deed.

If the property has vested in the heirs or devisees, the Administrator or Executor should not sign the deed.  See the citations above.  There is no title in the Administrator or Executor to convey.  The heirs or devisees sign the contract, exeecute the deed, and receive the cash proceeds.

There are, however, two instances in which the personal representative will sign the deed.  First, if the Executor is given the power of sale by the terms of the will, he or she should execute the will.  Second, if the sale is by court order, the Executor or Administrator should sign the deed.  §§ 91-7-187, -189, and -191, MCA.  The practical effect of sale by court order is to divest the title out of the heirs or devisees, as the case may be.

Necessity of bond.

When real property is sold pursuant to a decree of the court, the Executor or Administrator shall execute a bond equal to the proceeds of the sale of the land.  § 91-7-205, MCA.  This code section does not apply to a sale by the heirs or devisees in whom title has vested.

There is an exception to the requirement of bond.  If the time within which all claims of creditors against the estate has expired, the court may waive all or any part of the bond when all the beneficioaries to the proceeds of the sale petition the court to authorize the sale and waive the necessity of a bond.  § 91-7-205, MCA.

If an Executor or Administrator fails to give the bond required, the court may direct a master to make the sale, and, after confirmation, convey the land.  § 91-7-207, MCA.  An early case held that failure to give the bond voids the sale.  Buckner v. Wood, 45 Miss. 57 (1871).  

PROBATE OF WILL IN COMMON FORM

June 30, 2010 § 2 Comments

[This outline is based on the 15th Chancery Court District Newsletter published by Chancellor Ed Patten]

Admission of will to probate:

  • Original will must be presented and filed, if available.
  • Petition must have copy of the will attached.  Uniform Chancery Court Rule 6.15.
  • Will must be proven by at least one subscribing witness, usually through affidavit attached to self-proving will, or by proof of will executed later.  §91-7-7, MCA.

Caveat:

  • Will may not be probated in common form if there is a previously-filed written objection to probate.  §91-7-21, MCA.

Executor appointed and Letters Testamentary Granted:

  • Court appoints executor named in the will, if appropriate.
  • Executor must be over 18 years of age, of sound mind, and not a convict of felony.
  • If no person qualifies or agrees to act as executor, court may appoint one.  §§91-7-35 and 91-7-39.

Oath and Bond:

  • At the time that Letters Testamentary are granted, executor must take and subscribe the oath set out in §91-7-41, MCA.
  • At the time that the executor takes the oath, the executor must also post bond equal to the full value of the estate, unless bond is waived by the terms of the will.  Even so, the court has authority to require a bond.  §91-7-41, MCA.

Notice to Creditors:

Executor has the responsibility to give notice to creditors in the prescribed form and in the proper order set out in §91-7-145, MCA, as follows:

  • Executor to make reasonable effort to identify creditors having a claim against the estate and to mail them actual notice of the 90-day time period in which to file a claim.
  • Executor must file an affidavit of known creditors and attest to having served actual notice on them.
  • Executor must publish notice in newspaper publsihed in the county informing creditors that they have 90 days in which to file a claim against the estate; publication to run 3 times, once per week for 3 consecutive weeks.
  • Executor is required to file proof of newspaper publication in the court file.
  • Publication may be waived by the court in very small estates having value not more than $500.

Inventory and Appraisal:

  • If not specifically waived in the will, the executor is required to complete and file inventory and appraisal within 90 days from the grant of Letters Testamentary.  §91-7-45, MCA.
  • The court may require inventory and appraisal eben if waived in the will.

Interim Hearings:

  • Held as necessary to resolve interlocutory conflicts between the parties.

Accountings:

  • Accountings are required annually and upon closing the estate. 
  • All parties may agree to waive final accounting, and by custom also annual accountings.

Petition to Close Estate and Discharge Executor:

  •  Final account must be filed with petition to close unless excused by the court.
  • All parties in interest must be summoned to hearing on final account and petition to close.  §91-7-295, MCA.
  • Any party may enter an appearance by consent and waiver.
  • If approved, the court enters its final judgment for final distribution of any property remaining in the executor’s care.  §91-7-297, MCA.

WAIVING ACCOUNTING IN ESTATES

June 28, 2010 § 2 Comments

[This information comes from the outline of a presentation made by Bob Williford to the Chancery Judges Spring Conference earlier this year.  Used with  his permission.]

Intestate Estates:

  • An Administrator is required to file an annual account and a final account.  §§ 91-7-277 and 291, MCA. 
  • Although the statute does not provide an exception to the filing of a final account, a final accounting may be waived “on good cause shown.”  § 91-7-291, MCA.
  • The Administrator may be relieved of the duty of accounting by waiver of all parties interested in the estate of their right to an accounting.  34 C.J.S. Executors and Administrators, § 834.
  • If all of the heirs of the estate join in a request to waive annual account, the court would seem to have discretion to do so, but the court does have statutory authority to waive the final account. 

Testate Estates:

  • An Executor is required to file annual accounts and a final account.  §§ 91-7-277 and 291, MCA.   
  • case law, however, recognizes that a testator may waive the requirement of both annual and final accounts.  Harper v. Harper, 491 So.2d 189 (Miss. 1986);  Will of McCaffrey v. Fortenberry, 592 So.2d 52 (Miss. 1991); Matter of Holt v. Scott, 806 So.2d 296 (Miss. App. 2001).  BUT consider the following case:  Where accounting was waived in the Will, it was held that administration of the esatte was removed from jurisdiction of the court.  Bryan v. Bryan, 167 So.2d 56 (Miss. 1936). 
  • It is customary to waive accounting even if the Will does not expressly so provde, assuming all of the residuary beneficiaries join in the rtequest.
  • The court may require an account even if waived in the Will.  In re Estate of Carter, 912 So.2d 138 (Miss. 2005).  

BONDS IN ESTATES

June 22, 2010 § 2 Comments

[This information comes from the outline of a presentation made by Bob Williford to the Chancery Judges Spring Conference earlier this year.  Used with  his permission.]

Intestate Estates:

  • the Administrator is required to give a bond equal to the value of all of the personal estate.  § 91-7-67, MCA. 
  • Bond may be waived or reduced if (1) Administrator is the sole heir, or (2) all of the heirs are competent and agree in their sworn petition to waive or reduce bond, BUT
  • The court may nonetheless require a bond to protect the creditors if the court deems it necessary to protect their interests.  Smith by and through Young v. Estate of King, 501 So.2d 1120 (Miss. 1987).
  • At any time that the court deems the bond inadequate, the court may require the Administrator to give a new bond.  § 91-7-315, MCA.

Testate Estates:

  • The Executor is required to give bond in an amount equal to the full value of the estate.  § 91-7-41, MCA.
  • Executor who is also a residuary legatee may give bond conditioned to pay all debts and legacies of the testator within one year.  § 91-7-43, MCA.
  • If the testator in the will directs that the Executor not be required to give bond, then none is required unless the court or the clerk has a reason to require a bond.  § 91-7-45, MCA. 
  • Any creditor may petition the court to require the Executor to give a bond if the creditor believes that his or her claim is jeopardized due to bad management of the estate.  § 91-7-45, MCA. 
  • State or national banks domiciled in Mississippi are not required to give bond unless directed by the Will.  The court has discretion to waive the bond notwithstanding that the Will directs it.  § 81-5-35, MCA. 

SO EXACTLY WHO ARE THE HEIRS IN ADMINISTRATIONS?

June 18, 2010 § 5 Comments

§ 91-7-293, MCA requires in part that “The executor or administrator shall file with his final account a written statement, under oath, of the names of the heirs or devisees and legatees of the estate, so far as known … the statement must aver that diligent inquiry has been made to learn the same without avail … ”

So how do you know who the real heirs are?  There is a case in Clarke County where as far as the children knew the decedent had no other heirs, and the case proceeded on that basis until one fine day when a claimant popped up.  That case has been pending a dozen years, with an appeal and remand, and a third generation of lawyers.  The claimant says that the decedent fathered him while in the Air Force in California during the Korean conflict, and that he secretly stayed in touch with him through all the years.  The point is that the children were never aware that there was anyone else claiming to be a child.  The undeniable fact is that — especially in the case of a male decedent — we can never be entirely sure that the decedent did not have another child the family did not know about.           

Whether to require publication to determine unknown heirs in administrations was a topic of discussion at the Chancery Judges’ winter study meeting in January.  The consensus was that determination of unknown heirs should be required in all administrations, so you should be prepared to meet this requirement as you handle estate business around the state.  FYI:  in District 16 (Jackson, Greene and George Counties), you will be required to publish in both testate and intestate estates.

In sum, you must include an action to determine the unknown heirs of the decedent in all administration actions, with proper publication.  Thirty days’ notice is required for the action to determine unknown heirs.   

You will not be able to close the estate unless the action to determine unknown heirs is completed.

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