3: Additional Issues.
- Waiver of Bond for Executor (aka "Personal Representative"). After the death of a maker of a last will and the filing of the document with the appropriate probate court (usually the county and state of residence of the deceased), the next step is the appointment of an executor for the estate (who is known in the statutes of most states as a "personal Representative"). Prior to the court appointing an executor, this individual is required to post a bond with the court assuring faithful performance of the duties of that office on behalf of the beneficiaries and creditors of the estate. Obtaining a bond requires payment of a fee to companies such as insurance agencies that issue these instruments. The laws of most states allow the maker of a last will to waive the requirement of the issuance of a bond for the executor prior to his or her appointment. The advantage of waiving the bond requirement is saving the time and expense of obtaining a bond from an insurance company. To waive the executor bond requirement, language to this effect must clearly appear in the body of the last will. A situation where the bond requirement is typically waived is one where the major beneficiary of the estate (such as a surviving spouse) is also named as the executor.
- Independent Administration of the Estate. In a typical administration of a probate estate, the court supervises the majority of transactions that the estate makes such as the sale of assets and distributions of estate property to the beneficiaries. In independent administration, once the executor is appointed, state law generally requires only that the executor provide proper notice to creditors and timely file a sworn inventory, appraisement and list of claims. Thereafter, the court does not supervise the estate transactions and disbursements. Independent administration can be had in two circumstances: (a) where there is language in the last will authorizing it or (b) where all beneficiaries consent. The main benefit of independent administration is the lessening of legal fees necessary to properly comply with the reports and notices that must be filed with the court by the estate.
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Part 3: Continued.
- Federal Estate Taxes. A complete discussion of federal estate taxes is beyond the intended scope of this article; however, a few brief comments are warranted. The following is a table setting forth the Unified Credit against federal estate taxes and the resulting value of assets that may be exempted from estate taxes for the years listed:
| Year |
Unified Credit |
Exempt Amount |
| 2004 and 2005 |
$ 555,800 |
$ 1.5 mill. |
| 2006, 2007, 2008 |
$ 780,800 |
$ 2 mill. |
| 2009 |
$ 1,455,800 |
$ 3.5 mill. |
For example, if an individual dies in 2006 with a taxable estate for federal estate tax purposes, the first $2 million dollars of that estate will be exempt for federal estate taxes. For a brief description of what assets are included in the taxable estate for federal estate tax purposes, click here. See IRS Publication 950. If you have assets with a value close to the above exempt amount for estate tax purposes, you should seek professional estate planning advice to manage the federal estate tax issue. There are techniques available that may allow you to avoid having your estate taxed if proper planning is done prior to death. The MedLawPlus.com® forms available on this site do NOT account for estate tax issues.
- Devise by written list. The probate codes of most states empower the maker of a last will to device certain types of tangible personal property (such as clothing, furniture and other personal effects but NOT money) by separate written list not prepared with the same formalities as a standard last will. Check here to see if your state allows for devise by written list. Here is a sample form for devise by written list.
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