My now-deceased first wife made a good living for many years unscrambling the messes created by DIY probate where everyone was friendly until suddenly somebody wasn’t and then everybody else chose sides, piled on, or otherwise compensated for every hurt feeling since they were 4yos. It goes from “fine” to “unbelievable” in very short order.
My advice to the OP is: RUN AWAY!!! RUN AWAY!!!
All the more so once you mentioned your spouse’s family puts the fun in dysfunctional. You may be able to ignore the harm your in-laws do to each other, but you won’t be able to, nor really want to, ignore the harm they do your spouse.
This is very true. I know of one person (a lawyer) who was handling her dad’s estate and found it very emotionally wrenching. She said that every time she took her dad’s name off a land title, or a bank account, she felt she was wiping out everything he had worked hard for all his life.
Procrastinating on something like this may have an emotional reason, not just a “there’s no hurry” explanation.
There was an English court decision about a century ago where the deceased got a “Last Will and Testament” form from a stationery shop, filled it out by himself, and put it in a drawer.
The judge sitting on the resultant probate case, where everyone in the family was contesting the poorly drawn will, commented drily:
“No doubt when he finished drawing up his will, he thought he had done a good day’s work. And so he had — for the legal profession.”
I’ve got a pretty high opinion of my general competence at, well, anything. Over the years I’ve done lots of DIY stuff I shouldn’t have and have the scars (both metaphorical and real) to prove it.
Having just executed two in-state probates, both rather simple, and on the behalf of a small group of non-dysfunctional people, I’d no more have tried to do that without my lawyer in charge than swim to Europe or do brain surgery with a grapefruit spoon.
Someone will need to file the last tax return for the deceased. If they die early in the year, there might not be a tax return to file if there was no income. This last tax return isn’t too big of a deal other than the obvious problem that you can’t do your own.
However, if there were income-producing assets owned by the deceased, then if you may need to file an income tax return on form 1041 for the estate for the time income earned between the date of death and when the assets are disbursed to teh beneficiaries. The filing threshold is $600 per year, though hopefully it won’t last longer than a year. You will need to get an EIN from the IRS for the estate if you need to do this. You are allowed to pick a fiscal year for an estate, and you usually want to pick it so that you try to get the estate wound up in the minimum number of estate income tax years, thus creating it to end almost a year after the deceased’s death. You can either have the estate pay the tax, or you can pass it through to the beneficiaries on Schedules K-1, similar to a pass-through business.
I would highly suggest contacting a CPA (or EA) if you will need to file this return. If you do get a lawyer, they may have a CPA that they work with, or they may do the returns themselves. Likewise, if you find a CPA to do the estate income tax return, they may know a lawyer who could deal with the rest of it.
The income tax that the estate pays is entirely different than the estate tax, which is only levied on estates north of $10 million. As stated above, if the estate has over $600 of income, then tax needs to be paid on that income by someone.
Before I stepped into a no-will situation, I’d have a few questions?
Is there a house or other assets to sell or disburse?
Are all the assets in the same state?
Does your state have a mini-probate and is the estate small enough to use it?
Is there a form that all the potential heirs can sign to state that they’re willing to divide the estate in X manner?
Do you need to advertise for other potential heirs or to have the court approve a list of heirs?
Are the heirs going to have to provide birth certificates?
Are there bank accounts or retirement accounts?
Does anyone have access to the accounts?
We had no arguments about my mother’s estate, back in 2012, and she had a will. But we ran into a couple of things we weren’t expecting. We found out that as soon as an insurance company discovers that a house is empty, the insurance cost soars.
Also California will not transfer property unless it’s been through a California auxiliary probate. When an internet search found that the unimproved two-acre desert property in California was worth about $2k and that hiring a Riverside County attorney to take it through auxiliary probate was at least twice that, we all had to sign a document releasing the property from the estate. (I was 400 miles from Riverside, and I was the closest.)
The lawyer wrote it up and we all had to sign it. Years later, the property was sold for back taxes and Riverside County put the balance of the sale into an escrow. Each of us had to file paperwork to request our share. I sent in the will and the probate documents. Then they held it for a year and a half to be sure no one else would file a counter claim. I think we each got about $300.
Oh, and some retirement accounts can only be disbursed to or as other retirement accounts.
Many years ago I was dating a very nice lady, a high school teacher, and I would consider very mature and giving. At the time her brother was getting married (there were 6 siblings). For his (pre)wedding gift, daddy got him and the bride a colour TV, back when that was fairly expensive. Away from the wedding shower, she expressed indignation at the idea, thought dad was favouring her brother (she only had an old B&W TV.) Fun fact - between then and the wedding date, with a month to go the brother called it off.
I had to remind her - less than a year before, didn’t her dad pay the down payment for her on a new car so she could buy one a step up from her old and unreliable one? (Not sure what a down payment would be, but surely at least the same as a colour TV).
And these were mature late 20’s siblings, not a bunch of teenagers, and I would hardly call any of them spoiled. Sibling rivalry runs deep and is easily triggered.
All the more reason to keep track of costs and have an open accounting. As for items of emotional value, perhaps it’s better to have a process - flip a coin, draw straws, “take turns - each person pick one item at a time”, make especially valuable pieces part of the estate “you want this, it’s worth $800, so it will count as $800 of your share of the estate”.
If a dispute develops, the biggest value of a lawyer is that sibling A will not think B is using their position to get an edge. I’m reminded of the old joke, reading of the will: “I, being of sound mind, spent it all while I was alive…”
Most has been said, but I’ll add some specifics. With that said, every State is different, so this is general advice on your specific questions/statements:
“Spouse wants to act as Personal Representative, in order to avoid paying lawyers.” - The Estate will need a personal rep regardless of whether lawyers are involved. The lawyer would just help the personal rep handle the Estate.
“But, what is missing for me in all of the instructions is what is meant by "file this form”." - Generally, there are Clerks and Courts. They are different. The Clerk receives and handles the documents. The Court uses those properly filed documents in hearings, trials, etc. The point is, you file documents with the Clerk. You can file in person inside the Clerk’s building (or a drop off box), or mail. The key is to find out what your Clerk offers and send it to the right place. Also, you can turn the documents into PDF’s and file them with the Clerk online. You’d need to setup an account to do that (search the Clerk website for how to do this if they allow it).
You should find your Court and Clerk website. For example, I live in Harris County, Texas and I googled “clerk of harris county probate courts”. There is a website for the Harris County Probate Courts. And a different one for the Harris County Clerk. Go to the Court website and search for “pro se”. That means acting without an attorney. Harris County Courts has this Pro Se FAQ. You’ll want to make sure you’re good to go and regardless, it should have helpful info and provide some step by step info for your particular county. Like people have mentioned above, the get a lot of the same questions and try and provide a FAQ to answer most of the basic stuff.
The basic probate steps are to: Initiate probate with a filing with the clerk; Ask the Court to allow your wife to be administrator/personal rep; determine who the heirs are (not as easy as it sounds); determine what the assets/money owed is; keep the court up to date as required; do a final disbursement and close out the Estate. *There are many sub-steps within these basic steps.
This is hard even when everyone agrees (or thinks they agree at the start). If any of those steps are contested, it gets really bad really fast and I couldn’t imagine doing it without a lawyer.
Again, every State, and even County level, can vary wildly as far as law/steps required.