Probate

[ParallaxTF]

My family here in Colorado is in the process of settling my mother's estate. She had one CD at USAA Bank that has matured but we are suddenly having trouble receiving the funds from them. The estate is around $300,000, all liquid. My sister tells me that this bank now wants my mother's will probated. As Colorado generally does not require this unless the will is contested by an heir, we all fail to see what the delay is and how they can insist on such a thing.

 

[ALawyer]

First USAA is a rather fine organization and I doubt they are playing games with you by refusing to make distribution directly to the beneficiaries named in the Will.

What looks like a Will, says it is a Will, and feels like a Will, is NOT necessarily valid, nor the LAST Will (believe it or not people repeatedly come up with later wills), or that there may not be creditors that come up out of the woodwork or taxaes payable. If there would be any of these claims against the estate. The probate process is what is used to "prove" the document is in fact her last Will, there are no challanges to it, and any claims against the estae are adjudicated under court supervision.

If the account was solely in her name, it now is the property of her estate, and only the executor named in a Will AFTER THE APPOINTMENT IS CONFIRMED by the probate court, or a Personal Representative of her estate designated by the probate court, has rights to the money. Further if the bank paid a beneficairy and any creditor did not get paid, or any Fedreal estate tax was not paid, the Bank could be held liable to the creditors/tax authorities if it did anything else. Sorry.

In some cases it is true an institution may waive the requirement that it be probated IF the beneficiary is the principal heir at law, all other possible heirs at law have signed waivers and authorizations to pay the money to the beneficiary, and have agreed agree to indemnify the bank should any claims be made.
But that's the exception, rather than the rule for nationally operating instiutions.


For the bank to pay the person named in what you say is a Will (and I believe you) mean the Will is is NOT dispositive

 

[ParallaxTF]

Thank you for the input. But as things actually stand, we (my sister is executor) have not asked the company to distribute funds to any beneficiaries, but to the estate of our mother, through the last account in her name. We have supplied all of the documentation requested by the company and were told all was in order.

She suffered Alzheimer's, and as her family (I was P.O.A. and caregiver until her hospitilization), we had handled her finances for some time and know that there are no creditors or taxes owed. There is no other family to make a claim. As the estate is a small one, I worry that there wouldn't be much left after going through the courts.

 

[advisor10]

1-10-2002

DEAR PARALLAX:

You refer to your sister as the executor, but is she merely acting in that capacity (doing the duties) or is she an official executor who has received legal authorization from the probate court to act in this capacity? If/when she files the will, she will automatically receive the legal papers authorizing her to claim any and all assets.

Did your mother designate a beneficiary on her CD account with the bank? If she did, then that beneficiary may be able to claim the monies directly without it even having to go through probate. You would need to check with a business law or probate attorney to verify that this is true.

Were you aware that your authority as power of attorney expired at the exact time the death occurred?

Is the CD specifically mentioned as an asset in the will or is it not mentioned at all?

You should also check with an attorney or with the probate court to find out what the minimum amount is required of an estate (in your state/county) for probate to be needed. If the CD is considered a probate/estate asset, then you would obviously need to submit it for probate (where the expenses would be minimal and reasonable). You don't need to worry about the estate being eaten by large expenses, since generally the executor fee ranges less than 6% (I will research what the fee is in Colorado and post it later on).

SINCERELY,

advisor

 

[ParallaxTF]

I do understand that there is no POA at this time. I meant to convey that I could attest for a fact about creditors and taxes. Also, my sister is named in the Will as executor, with all the resposibilities and authority therein. The CD in question was an investment we made with Mom's funds on her behalf, with no beneficiary named. The CD is also not mentioned in the Will except to say that the estate be divided equally between the beneficiaries.

Colorado Statutes do not reqire that a Will be filed unless contested, so that except for the Will itself, no legal papers need be issued for the executor to act to gather and distribute the estate's assets. This seems to be the biggest stumbling block. In Colorado law IT IS NOT REQUIRED TO PROBATE A WILL UNLESS IT IS CONTESTED. It even goes so far as to absolve institutions like USAA from liabilities when acting within the Colorado statutes.

Each answer I've received thus far begins with a false assumption that probate is required as a matter of course. Colorado is apparently unique. I really don't consider a $30,000 chunk out of such a small estate to be modest or reasonable, especially when not required by law.

And USAA has simply not deigned to explain themselves to us here.

 

[advisor10]

1-14-2002

Apparently it is USAA that is not aware that wills are not required to be probated unless contested. Even if you explained that to them, they would still probably find some other reason to stall (you know how bureaucracies are).

They would need to explain their reasoning to you in order for you to figure out a way around it.

If you have an attorney representing you or access to one, then have them get in touch with the bank's attorneys to try to negotiate a compromise.

If you will send me an e-mail to my e-mail address shown below, I have a suggestion about your unique situation that you may want to consider.

SINCERELY,

advisor (e-mail: [email protected])