An Administrative Proceeding is a process by which an estate is distributed according to a given state’s intestacy laws while being supervised in court. When a person passes, if they have never gotten around to any form of estate planning and therefore pass away without a Will or Trust, the estate is subject to an administrative proceeding. Now while being similar to Probate and often confused with Probate, the administrative proceeding differs. Probate is when someone passes away with a will that outlines who gets what and how to divide the estate. When a person passes without a Will or Trust, intestacy laws come into play. This typically means that the closest living relative/relative would inherit your estate.
Intestacy Laws
Intestacy Laws state how your assets will be divided if you pass without a Will or Trust. Some examples of different case scenarios are:
- First Scenario- John has passed and leaves a wife and two children. In such a scenario, the wife would inherit half of the estate, and the two children would get the remaining fifty percent in equal shares, so twenty-five percent to one child and twenty-five percent to the other.
- Second Scenario – Michelle has passed away with no surviving spouse. During Michelle’s lifetime, she was married twice and left behind two children from two separate marriages. In this case, they are both blood-related, and according to the intestacy laws of New York, they would both split Michelle’s estate fifty percent to one and fifty percent to the other.
- Third Scenario- Steven passes away. He was never married, and he had no children. Both his parents passed away several years back, and his closest surviving relative would be his sister Jessica. In this case, Jessica would be entitled to receive one hundred percent of Steven’s estate according to the intestacy laws of New York.
- Forth Scenario- Alex passes away. His wife Lauren passed several years before him, and they never had children. Alex was 91 years old when he passed both his parents predeceased him many years ago, he didn’t have any brothers or sisters, but his mother had a brother who is still alive, and his father had a sister who is still alive. In this case, they would be considered his closest living relatives, and his aunt and uncle would inherit his estate in equal shares.
What documents or information do you need to file for Administration?
To file for Administration or, in other words, to start the administrative proceeding, you will need to gather some information and documents. For starters, you will need to get an original of the death certificate as you will need it for filing. Next, you will need to assemble a list of all the assets, such as bank accounts, real estate, jewelry, stocks, bond, and so on, as you will need this information and the value for filing. Third, you must create a list of all the closest surviving relatives and notify them that an administrative proceeding is taking place. By law, they need to be notified and given a chance to come forth and claim what may potentially be theirs under the intestacy laws. One of the most important things not to forget is a list of debts and outstanding taxes. Debts and taxes must be paid in full before any asset distribution occurs.
After the Administrative Proceeding
Once the administrative proceeding is over, all debts are paid off, and all taxes are settled, the intestacy laws of the given state then distribute the estate. This is where we tend to see a lot of family disputes begin to arise. At times, there might be a piece of property like a home that is split among two, three, or more people. In such a case, it is common for someone to come forth and offer the others to buy them out, put the property up for sale, and divide the proceeds equally among everyone. This can prove not easy when one has more money than the other or someone in the group that just inherited currently resides in the home. Jewelry and family heirlooms also cause issues since some people may have attachments while others don’t wish to part with the cash value of such items. Overall good negotiating skills and compromise can prove valuable during these times.