Advice for Families in Probate or Trust Distribution

by Terrell Monks on Sep. 28, 2016

Estate Wills & Probate Estate  Trusts 

Summary: Guidance for people who are in probate cases or Trust Administration

Advice for Families and Fiduciaries going through a Probate or Trust Administration in Oklahoma

1.      Make detailed notes of all you do and the reasons you made your decisions. Quite often there will be opportunities for other family members and beneficiaries to question your decisions: “why did you sell the house at that price?” or “Why didn’t you have an auction?” or “Where did you deposit the income from that rental?”  If you have kept a detailed ledger of income and expenses, and if you can recall (with the aid of your notes) why you made those decisions, there is a much smaller chance that you will be called on to defend those decisions before the court, and a much greater chance that your decision will be approved by the judge, if you are called to answer on the witness stand.

2.      Do not mix your personal funds with money belonging to the estate or the trust.  In Oklahoma the Personal Representative owes the estate a fiduciary duty to the estate; the duty to handle the estate affairs in the estate’s best interest and never put the Personal Representative’s interests ahead of the estate.  Do not borrow from the estate; do not do anything that would make it appear as if you are treating the estate funds as if those funds belong to you.  You have a duty of full disclosure of your actions and the duty to exercise great care for the estate assets.

3.      Make a very serious effort to identify and locate good addresses for all of the creditors of the estate.  One of the benefits of probate is that the law can drastically reduce the time that creditors have to make their claims.  In order to make that very short time limit apply and be enforced, you should identify the creditors and give them the notice required by law.  You can, and should search the decedent’s business files, forward the mail and watch for bills, look at the bank records for regular payments that may be for debts, and you may even need to consider pulling a credit report.  If you fail to identify a creditor that could have been located with reasonable diligence, I expect that creditor will be able to overcome the defense you later try to raise on the basis of the Notice to Creditors you filed in the probate case.  That later claim may cause great hardship to the heirs and beneficiaries of the estate.  Remember – the hospital where the decedent passed away is presumed to be a creditor of the estate.  Be careful to tell your attorney all of the information you locate concerning those creditors.

4.      Inventory all assets belonging to the estate, and do it right away.  The state law requires the Personal Representative of the estate to file an inventory of all of the estate assets.  This means that you should make an effort to list all that the estate owns and state your opinion of the value of each item or class of items.  My clients will often choose to list some assets and values somewhat generally; for example, kitchen appliances, pots, pans, dishes, flatware, and related items with a total estimated value of $xxx.xx If the items have modest value individually, I have never had any objection to such an inventory.  I would not, however, include any item (or set) valued over $500.00 in such a compilation.

5.      Expect that the heirs will be occasionally emotional, vulnerable, and somewhat defensive.  When we lose a friend or family member that we loved, we may be far more likely to remember old hurts and offences. Things that would have meant nothing yesterday now bring tears and hard words.  Be prepared for that, and compensate for it.  Speak more kindly than you feel. Be more flexible, more patient, more understanding, and give support even when it does not seem to be earned.  This extra effort will hold the relationships together and will reduce your attorney fees.  This is a great result that is worth your effort.

6.      Seek and consider input from the heirs and beneficiaries. The Personal Representative (or Trustee of the Trust) makes the final decision in many events and transactions.  That does not mean that the trustee or personal representative should ignore the input from other beneficiaries.  The wise course of action is to assure that the beneficiaries believe that you heard them and understood their position, even if you decide on another course of action.  If all the beneficiaries, other than yourself, desire a particular action – you should seek counsel from your attorney.  Consider the possibility that you should concede their position.  To the degree that you can keep the peace, you are likely to reduce the attorney fees that are deducted from the estate.

7.      Do not hire novices.  Whether you are choosing an attorney, an accountant, an auctioneer, or someone to hold a garage sale for the estate, hire people who have handled matters like this before, preferably several times.  The potential savings that you hope or expect to realize when you hire a young or inexperienced professional will almost never be realized.  Experience really is the best instructor.  The Oklahoma Supreme Court has been known to say that parties to a lawsuit choose their attorney at their own peril. Choose wisely.

Consider the value of having your actions as Trustee judicially reviewed.  Oklahoma trustees have the option of petitioning the court to review their accounting, consider the proposed distribution, and enter an Order approving the actions and distribution of the trustee.  If there is a trouble-maker in the family, a deadbeat, a perennial plaintiff, or if one of those characters is married to someone in the family, it is advisable that you, the trustee, get a judicial determination that your actions as the trustee have all been made in good faith and in compliance with Oklahoma law.  Once the Court has entered an Order relieving you of liability, none of the beneficiaries or their successors may bring a suit against you for your acts as trustee. 

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