Probate and Uniform Probate Code

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In the first half of this course we covered various techniques available to testators to prepare an estate plan or surrender to the default estate plan of the state—intestate succession. In discussing different states’ procedures, we focused on individual states’ statutes.

In an attempt to establish some type of uniformity in the area of wills and intestacy law, the Uniform Probate Code (“UPC”) (akin to the U.C.C. in contracts, albeit not with such widespread acceptance) was conceived. Actually, there are two Uniform Probate Codes. The original UPC was promulgated in 1969; the revised UPC was promulgated in 1990 and it was amended in 1993.

In addition to enacting their own statutes, some states have incorporated all or a part of the UPC into their system, either the original or revised version. To date, approximately 18 states have adopted the UPC, either selectively or wholesale. As a result, the laws of nearly all jurisdictions have been affected by the UPC.

At common law, there were two types of procedures for admission of the will: probate in common form and probate in solemn form. Probate in common form was an ex parte proceeding in which no notice to interested parties was required. Under a probate in solemn form, notice was required to be given to all interested parties, who could challenge the will.

Jurisdiction over administration

Probate is the judicial proceeding in which an instrument is established as the duly executed last will of the decedent. If the decedent died intestate, the proceeding determines the decedent’s rightful heirs. Furthermore, the proceeding also allows for the orderly transfer of the testator’s assets to his or her heirs after payment of administration and funeral expenses, taxes and creditor claims.

Most states have special courts, usually called probate courts, which have sole and exclusive jurisdiction over probating wills, granting administration and appointing and supervising personal representatives. The county where the decedent was domiciled (i.e., lived) at the time of death is usually the proper venue (location) for the estate proceedings. See, e.g., UPC § 3-201. For those decedents who own real property in another jurisdiction, another probate proceeding must take place in that location to distribute that property. This is known as ancillary probate or administration.

Although decedents typically only have one domicile, that does not preclude another state from also claiming the decedent as a resident, thereby subjecting the decedent to a duplicate probate proceeding.

EXAMPLE (1): Dorrance, heir to the Campbell Soup fortune, was found to be domiciled in two different states, New Jersey and Pennsylvania. As such, each imposed an inheritance tax of approximately $17 million. The dual residency conclusion resulted from: (1) the fact that reasonable people could differ as to the conclusions to be drawn from the facts presented; (2) each applied different standards regarding changing one’s domicile; and (3) both states wanted the $17 million. See In re Dorrance’s Estate, 163 A. 303 (Pa. 1932).

Example (2): In Texas v. Florida, 306 U.S. 398 (1939), the United States Supreme Court said that it would not make a determination of domicile where four states had made tax claims based on domicile. The states themselves would be left to make that determination. (The claims exceeded the total of the $42 million estate.)

Needless to say, it is imperative for any testator who spends substantial time in more than one location to clearly document his or her living arrangement. As documented in the above examples, any claim to a decedent’s estate by more than one jurisdiction will probably lead to a protracted and expensive fight for the beneficiaries.

Time for probate

The time for probate starts to run at the testator’s death. Some states have no deadline for probating a decedent’s will. See, e.g., In re Estate of Schafroth, 598 N.E.2d 479 (Ill. 1992). In other states, the statute of limitations can extend up to three years after the decedent’s death. See, e.g., UPC § 3-108.

Generally, most jurisdictions follow similar steps in probating or administering an estate:

1. Open the estate—duly executed will is admitted or intestate heirs are determined; personal representative is appointed.
2. Collect decedent’s probate assets—personal representative takes possession and control of probate assets; the personal representative has the right to sell assets, if necessary, to satisfy claims.
3. Protect surviving family members—where appropriate, a family allowance is paid, homestead rights are fixed and an exempt personal property set-aside is made.
4. Pay creditors—notice to creditors is given by publication; personal notice is given to known creditors; personal representative also has the right to deny claims.
5. Pay taxes—personal representative is responsible for filing any applicable tax return, namely decedent’s final income tax return, estate and fiduciary tax returns; taxes are paid from estate assets.
6. Distribute the assets—after paying all administration expenses, creditors’ claims and taxes, the remaining assets are distributed to the beneficiaries.

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