Estate administration is the process of winding down the estate of someone who has passed away. Estate administration is a legal process, and the Chancery Court has jurisdiction. During estate administration, the court appoints someone to manage the process. This person or entity is called the administrator or the executor. Traditionally, if the decedent left a will, the person is referred to as an executor. Otherwise, the person is called an administrator. However, oftentimes the terms are used interchangeably.
The job of the administrator (or executor) is to manage the estate through administration so that assets can be distributed, and the estate can be closed. If the decedent left a will, it will guide many of the administrator’s actions. Ultimately, the administrator must follow Mississippi law and orders of the court.
The major steps that the administrator must perform during the estate administration process include:
- Inventory and appraise estate assets
- Pay estate debts, expenses, and taxes
- Distribute estate assets
Inventory and Appraise Estate Assets
After being appointed, one of the first things that the administrator must do is inventory and appraise estate assets. Keep in mind that only assets that are considered “probate” assets come under the control of the administrator during the estate administration process. This means that assets that have designated beneficiaries or that were jointly owned by the decedent with survivorship rights are not part of the probate estate.
Pay Estate Debts, Expenses, and Taxes
While beneficiaries and heirs look forward to asset distribution as the main goal of the administration process, paying estate debt is another priority of the administration process. In fact, it takes precedence over asset distribution.
The administrator is required to notify the decedent’s creditors. If the creditor is known, a notice must be sent to the creditor’s last known address. For all other creditors, a notice must be published. Creditors have 90 days from the first day of notice publication to file claims. Miss. Code. Ann. § 91-7-145. Only creditors who file claims within the 90-day claims period can receive payment. However, the administrator will only pay claims that are also valid and only to the extent that there are assets in the estate to do so.
If there are not sufficient assets in the estate to pay all claims because the estate is insolvent, the first debts that will be paid are the expenses related to the decedent’s final illness, the decedent’s funeral expenses, and expenses of administration.
Distributing Estate Assets
Asset distribution occurs toward the end of the estate administration process. If there is a will, the administrator must look at the terms of the will to determine how to distribute the property. If there is not a will, then the administrator must look to Mississippi’s law of intestate succession to determine who has the right to inherit. The surviving spouse and children would be first in line to inherit, followed by the decedent’s parents and siblings.
Closing the Estate
Once debt has been paid, assets distributed, and all other instructions of the court have been followed, the administrator’s job will be done, and the estate will be closed.
Most activities during the estate administration process are routine. While they may be time-consuming, they are typically uneventful. However, sometimes disputes develop during the process that must be addressed before the estate administration process can move forward. Some of the more common types of disputes that develop during estate administration include:
- Will contests. A will contest is a dispute over whether the will is valid
- Will construction. If a term in the will is open to conflicting interpretations, the court may have to step in and settle the dispute.
- Guardianship conflicts. A dispute may develop over who is to serve as the guardian of minor children or over the actions of the guardian.
- Accounting disputes. Interested parties may challenge the accountings submitted by the administrator.
- Breach of fiduciary duty. If there are questions related to the actions of the administrator, they can be challenged in court.
Any type of probate dispute can cause a delay in the process and added expense to the estate. Depending on the type of dispute the impact may be even more significant.