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Marshaling Probate Assets and Probate Accounting

Marshaling Probate Overview

Once a personal representative of an estate has been appointed and issued letters of administration from the court the personal representative will be required to marshal all of the decedent’s assets and debts subject to probate and to account for his or her dealings with those items of property/debts.

Marshaling the decedents assets and debts is one of the most important aspects of the personal representative’s administration. Marshaling means that once appointed by the court the personal representative is legally required to locate and take charge of any probate assets or debts belonging to the deceased individual and include them in the probate Estate. (View Resource)

Once all of the assets and debts are determined the personal representative will be required to appraise any real property and other tangible assets. This process typically requires the personal representative to hire a real estate appraiser to appraise the real property at fair market value on the date of death of the decedent. If there are other specialty items in the Estate such as artwork or collectibles the personal representative will likely need to find an expert appraiser to provide a fair market value of those items. (View Resource)

This process of inventory and appraisal must be completed within six months after appointment and a copy of the inventory and appraisal must be provided to every interested party, heir or creditor of the Estate who has demanded notice in the proceedings.

If the personal representative discovers any additional assets or debts after the inventory and appraisal has been provided to the interested persons, he or she must prepare a supplemental inventory and appraisal to account for the additional assets and then provide that additional information to all interested parties.

The process of accounting is relatively straightforward and is much the same as accounting for any business checking and/or savings account. Each item of income and expense will need to be categorized and explained to the interested parties and if need be, to the court.

During administration but prior to the final distribution of the estate the Personal Representative has a right to possession and control of all items of estate property but may not use any assets for their own personal use. The personal representative may allow any heir or other interested person who is presumptively entitled to an asset to retain possession and control thereof. This is most important where there is a surviving spouse who wishes to remain in the decedent’s real property during administration. In that case, the personal representative should allow the surviving spouse to remain living in the decedent’s real property throughout the process of administration of the estate if possible.

A personal representative has the same power over the title to property of the estate that an absolute owner would have, although the representative’s power is in trust for the benefit of the creditors and others interested in the estate. The personal representative’s power to sell or otherwise encumber property of the estate may be exercised without notice, hearing, or order of the court in most circumstances.

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Sam Walker

Sam Walker

(612) 289-0095