effect an equitable division of that proper- ty. Automobiles can usually be valued on- line within a few minutes. I prepare most estate inventories in Excel.
I advise executors that their job is to mar- shal the assets of the estate, and effect the prompt distribution of the residue. They should not speculate with stock prices or interest rates. The estate accounting will be simplified if bank accounts are closed and securities are sold promptly, and all of the estate assets are consolidated into one account. It takes time to keep track of re- curring dividends and interest payments. Reinvested dividends and capital gains are especially problematic. Under no circum- stances should an executor or the execu- tor’s broker be purchasing securities within an estate.
Although this entails publication costs, I usually encourage executors to publish a notice to creditors in the newspaper of re- cord. Otherwise, the executor may be per- sonally liable for any unpaid claims that may arise within three years.9
This is now often
done online. If it is clear that there is suffi- cient cash with which to pay the debts of the decedent, we simply pay those debts as they are known. If the estate is insolvent, or if it is not clear that there is sufficient cash with which to pay those debts, we send a copy of the notice to creditors and a written statement of claim to all known creditors.10
At the end of our initial conference I give executors an estimate of the time that will be required in order to settle the estate. For purposes of this article I am assuming that estates are not taxable, as they fall below the $2,750,000 Vermont estate tax thresh- old.11
services at closings, as this complicates the preparation of the estate accounting. I ad- vise executors to file Form HS-132 to with- draw the homestead declaration by April 1 of the year following the date of death, unless the properties are sold before that date, when that form should be filed.12
I
also remind executors to cancel homeown- er’s insurance policies after the property has been sold. Since it usually takes about a month to
This time estimate depends upon when the decedent died, and the extent of their taxable income. If they died late in the year, or if they died early in the year with in- sufficient income to warrant filing a final in- come tax return, their estate can often be settled within about six months, after the four-month period allowed creditors has expired. If the decedent died earlier in the year with enough income to require filing a final income tax return, their estate can usually be settled within about one year. If real property within an estate is to be
retained, I advise executors to have us com- mission an owner’s title search. The cost of such a search is considerably less than the cost of reopening an estate, should the ex- ecutor inadvertently neglect to provide us one or more deeds that are in the chain of title. With interest rates near historic lows, and town tax bills due quarterly, semiannu- ally, or annually on different dates, we usu- ally pay town taxes for the balance of the fiscal year as soon as the executor has been appointed. I advise executors to confirm the adequacy of property insurance. When real property is sold, I do not charge for my
24 THE VERMONT BAR JOURNAL • SPRING 2012
secure tax clearances from the Vermont Department of Taxes, I prepare Form E2A, the Vermont Estate Tax Information and Application for Tax Clearances, for exec- utors shortly before the estate is ready to close. I enjoy preparing final accountings, since all of the information is within Quick- en, where it can be readily retrieved. I gen- erate a report in Quicken, and have it sub- totaled by category. I then export that re- port to Excel, where those categories can be converted into schedules to accompany the probate accounting. When the estate is ready to close I ask the bank or brokerage firm to send us a check for the balance, which we deposit in our firm’s client trust account. At that point all of the estate income has been earned. I generate another report in Quicken in or- der to prepare the fiduciary income tax re- turns for the estate. I send those tax re- turns to the executor, together with checks payable to the residuary legatees, receipts therefore, along with stamped, self-ad- dressed envelopes, and the decedent’s es- tate closing report and discharge. With proper planning, estate administra- tion can become an enjoyable and impor- tant practice area for many practitioners. We do our clients and courts a service by leading them through this process prompt- ly and efficiently.
____________________ Joseph F. Cook, Esq., is a partner in the Brattleboro firm of Corum Mabie Cook Pro- dan Angell & Secrest, PLC. He chaired the subcommittee of the Committee of Rules of Probate Procedure for Probate Court of the Vermont Supreme Court that imple- mented the Vermont Trust Code.
____________________ 1
File 1. 2
U.S. Census Bureau, 2010 Census Summary, Id.
3
http://www.southernvermontattorneys.com/ profiles/documents/estateadministrationcheck-
list.pdf. 4
14 V.S.A. § 108. 5 14 V.S.A. § 107. 6 68 F.R. 25090. 7 14 V.S.A. § 1052.
8 26 U.S.C. §1014 (2006).
9 14 V.S.A. § 1207(b) and § 1203(a)(2). 10 V.R.P.P. Rule 64(a). 11 32 V.S.A. § 7442a(c). See
12
http://www.state.vt.us/tax/pdf.word.
excel/misc/PROPERTY%20TRANSACTIONS%20 Info.pdf.
www.vtbar.org
Probate Administration in Vermont
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