With the help of a qualified estate planning attorney (usually the decedent’s attorney who prepared his or her Will and other estate documents) files a petition for Probate, on behalf of the decedent’s Personal Representative , with the Orphans’ Court through the Register of Wills (who serves as the clerk for the Orphans’ Court). Generally, the Personal Representative purchases a Probate bond, which serves a similar function as an insurance policy, protecting the beneficiaries of the estate, creditors of the estate and the State of Maryland in the event there are errors in the distribution of the decedent’s assets and/or fraud occurs as part of the probate administration process.
The attorney then completes a Notice of Appointment, which publicly announces the appointment of the Personal Representative of the estate. This notice, which is published for several weeks in a local newspaper, sets forth deadlines by which creditors must file claims against the estate (within the earlier of six months from the date of death or two months after a copy of the Notice is mailed to the creditor).
A Letter of Administration is the Order issued by the Orphans’ Court that formally appoints the Personal Representative of a decedent’s estate. Banks and other financial institutions often request an original of the Letter before allowing the Personal Representative access to and control over the decedent’s assets.
“Interested persons” include any party (individual or organization) that has a financial stake in the estate of the decedent or to whom the decedent was indebted. These include the decedent's heirs (surviving spouse, children and other persons who would inherit if there were no Will) and, if the decedent died with a Will, the personal representative named in the Will and all legatees (persons who inherit under the Will). All heirs must be listed even if decedent dies with a Will. The list of Interested Persons must be filed within 20 days of the Personal Representative’s appointment under administrative probate OR at the time of filing a petition for judicial probate or a petition for administration of a small estate.
Probate fees vary depending on the value of the probate estate. They can range from $200 to $2,500, plus .02% of the probate estate (gross) value in excess of $5 million.
What are the requirements for the inventory of the decedent’s assets?
A full inventory of the decedent’s property is due at the Register of Wills within three months of the Personal Representative’s appointment. The inventory must list all of the decedent’s assets, including appraisals or other evidence of each asset’s value.
The purpose of the Information Report is to determine whether there were non-probate assets that are subject to Maryland Inheritance Tax . Included in the Report are the value (with appraisals or other evidence of value) of assets titled jointly between decedent and others, assets for which the decedent has designated beneficiaries, assets held in the decedent’s revocable trusts and certain gifts made by the decedent within two years of death. Note: only if the co-owner or beneficiary is subject to Maryland Inheritance Tax must asset information be included. The report is due to be filed with the Register of Wills within three months of appointment of the Personal Representative.
The initial Account is due to be filed with the Register of Wills within nine months of appointment of Personal Representative and every six months thereafter until the estate has been distributed or is ready to be distributed. Each Account reports all receipts, disbursements and changes (e.g., sales) in assets that have occurred during the reporting period. Copies of the Account are required to be sent to the Interested Persons.
For estates valued at $50,000 or less ($100,000 if the surviving spouse is the sole beneficiary), there is a Small Estate Administration process available. For this purpose, “value” is fair market value less secured debts. For the Small Estate option, no formal Inventory or Accounts are required.
Probate fees in a Small Estate Administration are as follows based on the estate’s value:
The Modified Administration process, a streamlined process that allows an estate to be closed within 10 months and requires no Orphans’ Court involvement, is available if all of the following are satisfied:
All residuary beneficiaries named in the decedent’s Will, or heirs of a decedent who died without a Will, are limited to the Personal Representative, individuals exempt from Inheritance Tax or charitable organizations.
Where a Trust is a residuary beneficiary, Modified Administration is permitted so long as the current beneficiaries of the trust are exempt from inheritance tax.
The estate is solvent.
The Personal Representative and all residuary beneficiaries under the Will, or all heirs of the decedent who died without a Will, consent to Modified Administration on or before three months following the appointment of the Personal Representative.
A Final Report is filed with the Register of Wills within 10 months of the appointment of the Personal Representative. The Final Report includes the value of the decedent’s assets and all expenses incurred during the estate administration and decedent’s debts. Note: income generated during administration and changes in assets are not included on the Final Report. With the consent of the Personal Representative and those who consented to the Modified Administration, the filing deadline can be extended by 90 days. A second 90-day extension may be granted by the Register of Wills.
The estate assets are distributed to the beneficiaries within a year of the appointment of the Personal Representative. This deadline can also be extended by 90 days with the consent of the Personal Representative and those who consented to Modified Administration. If this additional 90-day period is not sufficient to make the distribution to the beneficiaries, the Register of Wills is authorized to grant a second 90-day extension.
Personal Representative commissions, which may be set by the decedent’s Will, and fees for the attorney representing the estate are subject to approval by the Orphans’ Court. No commissions or attorneys’ fees are allowed in a Small Estate Administration. If the following conditions are met, court approval need not be sought:
The statutory Commission cannot exceed 9% of the first $20,000 of the gross estate ($1,800) + 3.6% of the gross estate in excess of $20,000.
Attorney fees must be “reasonable” and are subject to approval by the Orphans’ Court.
In its review of a petition to authorize the payment of attorney fees, the Orphans’ Court must consider the Personal Representative Commissions and the amount being requested by the attorney. The total of the two can’t exceed what would be reasonable to administer the estate, often limiting the combined Commissions and attorney fees to the statutory formula for Commissions.