Part 1 of a 3- part series on estate administration shortcuts.
“There are no shortcuts in life-only those we imagine.” Frank Leahy
I wonder what Frank Leahy, a famous Notre Dame football coach, would say about a popular probate shortcut – Muniment of Title.
Determining the Proper Type of Administration for a Decedent’s Estate
A formal estate administration is not always necessary when someone leaves a will when they die. Determining the proper type of administration for a decedent’s estate depends upon several factors: the estate plan, type of assets and how they are titled, residence, and the value of the probate estate.
With this information in hand, you can determine if there is an available shortcut probate procedure that might save everyone time and money. The most common shortcuts are muniment of title, small estate proceeding, and family settlement. This column looks at the muniment of title proceeding, which involves the court declaring the will valid and that opening a formal probate estate is not necessary. The order, by itself, is sufficient legal authority to transfer assets to the beneficiaries.
Ready? Let’s see what is needed to determine if a muniment of title is right for the estate.
A Few Steps Needed to Determine if a Muniment of Title is the Right Choice
There must be a valid written will. The maker of the will must be deceased. You must file the application for muniment of title within 4 years after the decedent’s death unless you have an acceptable excuse.
The decedent must not have left any debts other than loans secured by real estate – such as a mortgage on a house. If the decedent died with a slew of credit card debts, unpaid taxes, or past-due child support, then the will is not eligible for probate as a muniment of title.
There must not be any other need for formal administration of the estate. If the decedent was in the middle of a lawsuit when he died, then that probably rules out a muniment of title proceeding.
Once you have decided the estate is qualified, the procedure is simple. You, through your attorney, file an application to probate the will as a muniment of title in a court with jurisdiction and venue, and citation is served. The court holds a hearing. Then, the court signs an order admitting the will as muniment of title only.
Once the order is signed, the beneficiaries then simply present the order to anyone in possession of the decedent’s assets. That person is authorized, by law, to transfer the assets to the beneficiaries.
After the order is signed you will have only one more interaction with the court: you must file an affidavit within 180 days that states what terms of the will have been fulfilled. The court can waive the requirement, or extend the timeline.
Simple, right? Not so fast.
The hiccup with a muniment of title order is that some third parties, such as banks and investment companies, are reluctant to accept them. They will only deal with an estate executor or administrator. For that, of course, a full estate administration must be opened.
Thus, a lot of beneficiaries, even with a valid muniment of title order in hand, find themselves back in court asking the judge to appoint an estate administrator. That is a waste of time and money.
The bottom line is that you should carefully research the requirements imposed by the third parties in possession of the decedent’s assets before you decide if the muniment of title route will work. For a lot of companies, a muniment of title is nothing more than an imagined shortcut.