Assets which are not subject to probate administration are referred to as “non-probate assets”. Examples include life insurance, joint bank accounts, and payable on death accounts. In each of these examples, the contract with the institution (and not the Decedent’s Last Will and Testament) controls the disposition of the asset upon the death of the owner.
A problem commonly encountered upon the loss of a loved one is the difficulty in determining whether there is an estate to probate. In other words, the family may believe that all of their loved one’s assets were non-probate assets and are not required to be part of the probate process. However, when they contact the life insurance company or the bank, they are informed that the institution will not provide them information to confirm if there is a beneficiary named and, if so, the identity of that party. Ironically, they are told that this information can only be provided to the personal representative of the estate!
What conditions may require the appointment of a special administrator?
Under these circumstances, there is an alternative to commencing the opening of a full probate administration through the use of a “special administrator”. A special administrator may be appointed to exercise such other powers as may be necessary to preserve the estate:
- If there is a delay in granting letters testamentary or letters of administration, from any cause
- If letters are granted irregularly.
- If no sufficient bond is filed as required by the court.
- If no petition is filed for letters.
- If an executor or administrator dies or is suspended or removed, and the circumstances of the estate require the immediate appointment of a personal representative.
- If there may be no assets subject to administration but good cause exists for the appointment of a personal representative of the decedent.
- In any other proper case.
How does a special administrator get appointed?
A petition is submitted for the review of the Probate Commissioner stating the circumstances and requesting the appointment of the special administrator. This petition does not require a hearing and can usually be accomplished in a matter of days as opposed to weeks to open the probate administration. Once the Court executes an Order appointing the special administrator the appointee will execute Letters of Special Administration which are then filed with the Clerk’s Office.
What are the duties of the special administrator?
The primary responsibility of the special administrator is to preserve the assets of the Estate. With the use of the Letters of Special Administration, you should be able to obtain the information sought about all of the assets to determine if they must be subject to the probate. In many instances, no beneficiaries have been named or a named beneficiary predeceased the Decedent and assets falling into this category will be subject to the probate administration.
Are there other uses for special administration?
Special administrators can be useful where a property is about to be foreclosed upon and someone with authority is needed to contact the Lender and negotiate a further delay. Special administrators may also be appointed in order to file tax returns on behalf of a Decedent to avoid late filing penalties. In addition, a special administrator may be appointed in the event of a Will contest in order to have a neutral third party move forward with the probate administration during the pendency of the dispute.
Can’t I use my loved one’s durable power of attorney to access the identify of a beneficiary?
No. The durable power of attorney for financial decisions terminates upon the death of the principal who executed the document. As a result, the institution will not be able to release the information you are seeking since you no longer have any authority pursuant to the power of attorney.
If you encounter these difficulties, don’t hesitate to contact our office at (702) 798-4955.