Estate Account & Court Orders?

[marek]

Washoe County, Nevada

I was curious whether a Special Administrators has the authority to open an estate account at a bank in order to collect liquid financial assets into it. Here are the responsibilities of the Special Administrator as outlined in NRS 140.040: "Collect and preserve for the executor or administrator when appointed all the goods, chattels and receivables of the decedent, and all incomes, rents, issues, profits, claims and demands of the estate. "

The tricky part is, the Special Administrator should collect all receivables but is not authorize to make any payments like an Administrator/Executor would, so the estate account would somehow need to be restricted for Deposit Only. What I don't understand is whether the Special Administrator should simply collect the receivables,such as checks made out to the decedent or his/her estate, or collect them and deposit them together into an estate account.

It turns out that because of the discoveries made during special administration, there will not be an executor/administrator appointed for the estate. Instead, a petition for set aside without administration will be filed. That leads me to my other question. How are checks made out to the Decedent's estate or the Decendent him/herself cashed and passed onto inheritors after a court hearing in the case of "Set Aside without Administration". Does the court issue an order that says the following items (maybe a list of checks) are now the property of the <inheritor> that can then be taken to the inheritor's bank for cashing the checks? ...just trying to understand the process ahead.

Thanks.

 

[Zigner]

OP's prior thread (for reference): https://forum.freeadvice.com/threads/how-to-file-for-letters-of-special-administration-without-knowing-estate-value-in-washoe-county-nv.654322/

 

[LdiJ]

Why doesn't the family just file to open probate and ask that someone be appointed as the executor/administrator? Why this whole "special administrator" bit?

 

[justalayman]

Op is trying to avoid opening probate and instead go through Nevada’s version of a small estate administration but doesn’t know if the estate qualifies without researching the estate.

What they really need to do is pay an attorney for an hour nor two and get some proper advice.

 

[marek]

LdiJ: "Why doesn't the family just file to open probate and ask that someone be appointed as the executor/administrator? Why this whole "special administrator" bit?"

Excellent question. This is one of the cases where the decedent died intestate and left virtually no information on his assets. He did not share with the family how much money or property he had. While the family suspected that his estate was worth less than $25,000, which would qualify them to claim his assets with an affidavid of entitlement, there was no way to confirm that until the value of his bank accounts became known. The employer was not forthcoming with information about the decedent's last paychecks, life insurance, profit sharing plan, etc. (and rightly so), but recommended that the family see a lawyer. The elderly parents (first in line by intestate succession law) visited a lawyer and found out:

1) The lawyer recommended to first discover the value of the estate by means of appointment of Special Administrator.
2) The lawyer wanted to be paid by the parents and not out of the estate (which conflicts with the operation of the probate court - the court approves attorney fees to be paid out of estate).
3) The lawyer would charge around $1500 just for the filing a petition for Letters of Special Administration.

When the parents saw that the legal fees would most likely exceed the value of the estate, they chose not to pursue the services of the first lawyer.

So, why not just open probate? The courts are overwhelmed with work. It would be irresponsible to burden the system more than necessary. Additionally, let's say that one chose to open probate under the small estate administration and then it was discovered that was the incorrect category. This would result in a lot more unnecessary work to get the filing changed over in the middle of the probate proceedings.

Subsequently, the parents have been aided by the Washoe County's legal services division. However, there are still questions that pop up and are not being answered by this over burdened system. Hence, these questions were posted to this forum.

justalayman: Your assumption "What they really need to do is pay an attorney for an hour nor two and get some proper advice." is incorrect. Lawyers have been consulted, however, one cannot run to a lawyer every time a question pops up. First, the family has done a ton of research online to address the questions that arose and resolved more than 90% of the questions without burdening anyone else. Any questions that were not addressed by this research and by correspondence with the Washoe County Legal Services have been posted to this forum.

I am left with the impression that this may be the wrong Forum to get other people's input. I've asked simple questions that one would normally expect to get other's feedback on in a forum, but the replies tend to be "go talk to a lawyer". The whole point of having a forum is to get other people's feedback who have been through a similar experience without the involvement of a lawyer. That leaves me with the sense that this forum only serves as a lawyer referral service.

 

[LdiJ]

LdiJ: "Why doesn't the family just file to open probate and ask that someone be appointed as the executor/administrator? Why this whole "special administrator" bit?"

Excellent question. This is one of the cases where the decedent died intestate and left virtually no information on his assets. He did not share with the family how much money or property he had. While the family suspected that his estate was worth less than $25,000, which would qualify them to claim his assets with an affidavid of entitlement, there was no way to confirm that until the value of his bank accounts became known. The employer was not forthcoming with information about the decedent's last paychecks, life insurance, profit sharing plan, etc. (and rightly so), but recommended that the family see a lawyer. The elderly parents (first in line by intestate succession law) visited a lawyer and found out:

You know, if you had simply put a forwarding address in with the post office, within a few months you would likely have all of the information that you need to determine what assets he had.

 

[marek]

First, a post office will not allow you to change someone else's address without having legal authority to do so.

Now, let me comment in retrospect. Once we obtained Letters of Special Administration, we used them to forward the decedent's mail. This was completely unhelpful since the decedent received all his banking information electronically.

The family contacted the landlord and requested that s/he hold the decedent's mail. The landlord became unreachable. The decedent had 2 roommates, who subsequently moved out of the place where he was staying. This barred the family from receiving any mail at the decedent's residence.

Additionally, leaving an estate to dilapidate may have adverse consequences. There maybe auto-billing done to a decedent's accounts that may greatly diminish the estate. IMHO, it is best to start addressing a decedent's estate ASAP.

 

[Dandy Don]

So are you a surviving spouse or an adult child of the decedent?

You do not need to open up a bank account to deposit any items you receive. Your job is only to report a list of the items you receive.

Have you in fact received the Letter of Special Administration after a hearing was held or are you just beginning the process of filing?

Sometimes people assume that attorneys from each of the 50 states in the US are reading this message board, when in fact that may not be the case. There is probably no attorney in Nevada looking at this message board, which is why it was suggested that you consult with a local attorney.

You can use the Letter of Special Administration to get the information from the bank about the value of the accounts they have. The fact that the decedent banked electronically does not make a difference--there are still monthly printed bank statements that can be retrieved to show all activity. You may have assumed that the bank automatically mails monthly bank statements to the decedent while he was alive or even after he was dead, but he may have chosen to receive his statements by email instead. You can ask the bank for copies of his monthly bank statements for at least the past 2 years, maybe more if you want that information.

You can use the Letter of Special Administration to present to the employer when you ask for what information he has about the decedent's assets.
Hopefully the employer will comply, but even if he doesn't, your responsibility is to make the effort to collect the information. If he doesn't respond, you can report that on the form.

You can also use the Letter to fill out a Change of Address for the decedent at the post office. Then only the decedent's mail (and no one else's mail, even though the other parties lived at the same address) will be sent to you.

When the Special Administration process is over, the court will issue you the authority to collect the money from the decedent's account. I'm not sure about the process, but if you have any additional questions about whether you can open up an account, perhaps you can ask the court if you can request an additional hearing.

It is automatically assumed when you file that the estate value will be less than $100,000.00 and it is pretty reasonable to assume that this "less than" amount may apply in your case. You will pay (or have already paid) a filing fee of no more than $300.00 if you valued the estate as less than $20,000.00 and you can apply for the fee to be waived if you have listed that you value the estate at less than $2,500.00.

https://www.civillawselfhelpcenter.org/images/Probate/set-aside-testate-packet-instructions.pdf

 

[justalayman]

First, a post office will not allow you to change someone else's address without having legal authority to do so.

Now, let me comment in retrospect. Once we obtained Letters of Special Administration, we used them to forward the decedent's mail. This was completely unhelpful since the decedent received

1) The lawyer recommended to first discover the value of the estate by means of appointment of Special Administrator.
2) The lawyer wanted to be paid by the parents and not out of the estate (which conflicts with the operation of the probate court - the court approves attorney fees to be paid out of estate).
3) The lawyer would charge around $1500 just for the filing a petition for Letters of Special Administration.

Until hired as counsel for the estate, whoever wants work done by the lawyer does pay them out of pocket.

You don’t intend on opening probate and hiring counsel for the estate so yes, your parents need to pay the man if they want him to perform work

The lawyer gets paid from the estate when he is hired BY the estate. . If probate is not being opened and the lawyer hired as counsel, then you get a la carte services.

And you’re right. I see now I was wrong. You don’t need a couple hours from an attorney. You need hire one to handle the entire estate for you. Given your lack of understanding of the rights and duties and purpose of a special administrator, you need more help than you’re willing to admit.

 

[marek]

Dandy Don: Thanks for your input. It is much appreciated. I understand the discovery process that Lettters of Special Administration entitle one to and the fact that one is not authorized to make payments or disburse any of the estate. I simply was not clear on the estate bank account question.

The link you posted is for a pdf document for a different county, but has proved to be quite informative nonetheless. Step 12 explains what happens after the set aside hearing. I am sure the process will be similar in our county.

I have to say the response from "justalayman" is quite inflammatory and not worth a comment, aside from the fact that anyone reading this topic has a chance to see the level of justalayman's powers of deduction and decide for themselves how to weigh justalayman's responses to their postings.

 

[marek]

Perhaps, others reading this may benefit from this experience. Since our case went through Nevada's Small Estate proceedings and the court ordered that we file for Set Aside Estate Without Administration, no executor/administrator has ever been appointed and no estate account was opened. Instead, the court order us to set aside listed assets and assigned them to relatives that inherited the assets. Two of the assets were a check that refunded a student loan payment and the last check issued by the employer.

Our estate lawyer advised us to take the court order and the checks made out to the deceased to a bank and cash the checks. The banks refused to cash the checks and stated that the checks can only be deposited into an account titled the same way as the checks. That's all fair. Strike 1 against the lawyer's advice.

Then, our estate lawyer advised us to open an estate account and deposit the checks there. Estate accounts can only be opened and administered by a court appointed representative who is authorized to disburse the estate assets. Since, based on the lawyer's advice and the court order, we filed for set aside estate without administration, no personal representative was ever appointed, hence, no estate account was opened. Strike 2 against the lawyer's advice.

Next, the lawyer suggested to request that the issuers of the checks reissue the checks to the inheritors according to the court order. We're in the process of requesting that, but, so far have been met with uncertain comments, such as, once a check is issued, they generally, don't reissue checks. However, they encouraged us to write a letter explaining the situation and provide the court order, the old check, and request to reissue the check according to court order. We'll do so and see what happens.

It seems that the small estate without administration proceeding works fine for transferring vehicles and bank accounts but doesn't work very well for checks. Even if the court assigns checks to whoever inherits them, the checks seem to be uncashable. I am curious if anyone else has dealt with a similar situation and how they resolved it. Our lawyer is taking stabs at it, but it has been a hit and miss, mostly miss, so far.

 

[LdiJ]

One way to avoid that problem is to leave one account open in the deceased name, and then transfer the money out of the account after its deposited.

Another option, which works as well, is to have someone trustworthy named on one of the deceased accounts before they pass away, so that that person can deposit checks and write checks...and leave that account open for a year or two to make sure that nothing else comes through. However, the person must be truly trustworthy because technically any money in that account would belong to them once the person passes away.

 

[marek]

Yes, in terms of estate planning, having joint owners of an account makes a lot of sense. Unfortunately, the deceased was a single owner of his bank account. The second the bank caught wind that the owner is deceased, they froze the account. This was unavoidable, because in order to discover the account at the bank, we had to present a death certificate and letters of special administration. Afterwards, no deposits or withdrawals could be made from the account. It's a strange little situation, where the court order says the checks are yours, but you can't do anything with them.