The next steps in a Small Estate are similar but at the same time quite different. This is primarily due to the required level and degree of filings and reporting to the Court in Small Estates and Regular Estates. Once a Small Estate is opened and a Personal Representative appointed, there is generally no further reporting or filing requirement. This in no way dismisses the Personal Representative of a Small Estate from their Fiduciary duties and responsibilities, nor does it relieve the Personal Representative of a Small Estate from the responsibilities of identifying and marshaling Estate assets, selling real property, Tangible Personal Property and vehicles, filing tax returns for the decedent, handling debts and Claims and, ultimately, distributing the Estate to the proper heirs or legatees.
The next step in a Regular Estate, in regard to reporting and filings with the Court, are to produce an Inventory Report and an Information Report. An Inventory Report is required to be filed with the Court no later than 90 days from the day a Personal Representative is appointed. During this 90-day period, as discussed above, the Personal Representative should, amongst other tasks, identify all assets of the Probate Estate and obtain proof of the exact Fair Market Value of each of those assets on date of death.
For real property, data from the Maryland State Department of Assessments and Taxation (SDAT) is acceptable to the Court. There are situations where an appraisal would be wise in place of a report from SDAT. In other situations, you may be in a position to submit the actual sale value of the property (if it occurs no later than twelve months from date of death). This is due to issues of taxation that can often be quite detrimental to the heirs of the estate. A discussion regarding those taxation issues is beyond the scope of this Guide. However, if you have hired an experienced Estates & Trusts attorney, they will assist with this issue and with obtaining the proper values for Estate assets. Often an attorney’s help in this one area can more than compensate the heirs, in the form of tax savings, for the fees an attorney may charge for their services.
Fair Market Value of Vehicles will likely be determined by accessing NADA or Kelly Blue Book. RVs, campers, boats, motorcycles and personal watercraft will be trickier to obtain verification of date of death Fair Market Value.
Fair Market Value of financial assets, such as bank accounts, CDs, credit union accounts, stocks, bonds, mutual funds, savings bonds, etc.. will be determined either by the statements that cover the period inclusive of date of death or by requesting a Date of Death Valuation Report. Assets with values that fluctuate, like stocks, bonds, mutual funds, and ETFs, will always require a Date of Death Valuation Report as their value mid-month cannot be readily determined by the monthly or quarterly statement.
There are many other possible asset types the Personal Representative might have to value. These assets may be complex, such as valuing the decedent’s business, a partial interest in a business, or units in a partnership or other complex asset. This is beyond the scope of our Guide. However, Estates & Trusts attorneys are generally quite skilled in this regard and can thus be invaluable to a Personal Representative, an Estate and its heirs.
Together with an Inventory, the Personal Representative must also file an Information Report. Generally, an Information Report is a report on assets of the decedent that do not pass under the Estate’s Probate process but that may be subject to Inheritance Tax. In some cases, the recipient of these assets may be liable for the Inheritance Tax (More on Inheritance Tax later). In other situations, the Inheritance Tax may be required to be paid by the Estate. Again, while these issues of taxation are important and can have serious adverse effects on the Estate or the beneficiaries, they are complex and beyond the scope of our Guide. An experienced Estates & Trusts probate attorney will be in a position to properly assist with such issues.