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Special Administration in Probates

            One of the major drawbacks of administering a decedent’s estate through probate is the delay in appointing a personal representative to administer the estate, i.e., the time that passes in between the decedent’s death and the appointment of a personal representative to administer the estate.   Even without opposition to the probate petition, the legal process to get an administrator (or executor) appointed can take around 4 weeks; depending on how quickly the petition is filed.  With legal obstacles or opposition, the process can drag on for many months during which no personal representative is in charge of the decedent’s estate and unfinished legal business. 

            During the interim period urgent matters related to the custody and preservation of the decedent’s estate may arise that require immediate attention and cannot wait till the general representative is appointed.  These could include the day to day operation of a sole proprietorship (business), the sale of perishable assets, the completion of a pending real estate transaction, and the protection of assets vulnerable to theft or destruction.  To save the situation the decedent’s heirs or beneficiaries can petition the court for the appointment of a special administrator to preserve or defend the estate, pending the appointment of a personal representative (or executor).

            A special administrator can be appointed at any time by the court.  The appointment can be made with or without notice to the other interested parties, as the court sees fit.   The court will consider the urgency and the nature of the special administration that is being requested before deciding what, if any, notice will be required. 

            Often, the person requesting appointment as special administrator is the same person requesting appointment as the general personal representative in the pending probate petition.  Sometimes, however, the Public Guardian, a private fiduciary, or a neutral party will instead be appointed to act as special administrator.  A private fiduciary may be necessary if particular skills are needed under the situation.

            The scope and duration of the special administration can be tailored by the court to suit the situation.  That is, the court has broad flexibility to grant “any powers that may be appropriate under the circumstances for the preservation.”  This means granting well defined powers in order to perform specific functions.  For example, the order might authorize the special administrator to do all things necessary to manage the on-going affairs of a sole proprietorship.   Otherwise, if not tailored, the special administrator has limited powers to take possession of property, collect income, and commence or defend lawsuits.  The special administrator with limited power may also, with court order, borrow money and pay interest owed on secured debts.

            Sometimes general powers of administration – i.e., the same powers allowed a personal representative – are granted to a special administrator when doing so “appears proper” to the court.  General powers allow the special administrator to sell property and to pay or reject creditor claims.  General powers are usually only granted when appointment of a personal representative will be delayed for months, such as when there is litigation over the terms of the will (i.e., a will contest) or over who should be appointed as the personal representative, then granting general powers may be needed move the estate administration forward. 

            Special administration typically concludes when the personal representative is appointed.  The special administrator then provides an accounting and turns over assets to the personal representative.   Sometimes, however, the court may allow the special administrator to continue and complete certain tasks.  Naturally, probate and special administration are best avoided by the decedent transferring his or her assets into a trust while alive.

 

           

           

 

Posted by: on: Jun 07, 2011 @ 11:04