When You Should Use Formal Administration Instead of Summary Administration

The court-supervised process known as probate helps ensure that a decedent’s debts and taxes are settled, and that all assets of their estate — from bank accounts and investments, to real estate — are properly managed and distributed. As a personal representative, you are charged with the vital task of helping to move this process along on behalf of the deceased, which is why it is crucial to know the distinction between the two major forms of probate — Formal Administration and Summary Administration — and why the former may in certain circumstances be the best way to handle and administer a probate estate.

An Overview of Summary Administration

Most people think of a formal (or full) probate estate as something you want to avoid at all costs, which is why summary administration is seen as a popular option. By definition, summary administration is designed to be a “shortcut” for settling an estate, but it is only an option for an estate in which the decedent passed away two years ago or more, or where the estate’s total value is not more than $75,000 (which amount does not include certain exempt property like homestead).

To initiate summary administration, the personal representative named in the Will (also known as the executor) or any beneficiary can file a Petition for Summary Administration with the probate court. This document verifies that the estate qualifies for the summary administration process, lists all the assets in the estate and their respective values, and sets forth the beneficiaries of the estate. The petition must be signed by a surviving spouse as well as any other beneficiaries; those who do not sign must be given formal notice of the petition’s filing.

In summary administration, your only role as the petitioner will be to file the petition: once it is accepted, the court releases the assets directly to the heirs and winds down the estate. Hence it is a faster and more straightforward approach to probate compared to formal administration. With a summary administration proceeding, there is no personal representative that is formally appointed by the court.

Why You Should Use Formal Administration Instead

Despite the apparent ease and speed of summary administration, depending on the circumstances, formal administration may be the better, if not only, option available to an estate.

For example, if the decedent passed away less than two years ago, or if the estate assets are worth more than $75,000, summary administration is unavailable.

Not only is summary administration limited to estates of a certain value, but it is ill-suited for handling more complex circumstances that may arise. If you anticipate that there may be multiple creditor claims to resolve, the estate will need someone with the legal authority to give notice to these creditors and address their claims. This is one of the key roles of a personal representative, who can be only be appointed through the formal administration process (and not a in summary administration).

Formal administration is also ideal for estates with multiple heirs, or for estates with complex logistical circumstances that will make distribution more complicated, such as if the heirs live all over the country or if there is a dispute amongst the heirs. Through formal administration, a personal representative can be appointed to sort these matters out so that the estate can be administered more quickly and efficiently.

Finally, formal administration is best for estates where litigation is anticipated. Because summary administration precludes the appointment of a personal representative, there will be no one with the legal authority to file a lawsuit on behalf of the deceased’s estate (in, for example, a wrongful death claim). A personal representative appointed in a formal administration proceeding not only has the power to file a lawsuit on behalf of the estate, but can represent the estate in any legal matters that may arise, such as an unnamed heir claiming a rightful interest in the estate’s assets.

How Jurado & Farshchian, P.L. Can Help

As a personal representative or a petitioner of an estate, you need not fulfill your vital role alone. Our probate attorneys have provided a wide range of professional services and guidance to assist personal representatives and petitioners with their critical duties. We will take the time to understand the nature and circumstances of the probate estate and to ensure that the best possible strategies and legal procedures are conducted accordingly, including assessing the kinds of probate administration that are best.

To learn more, please contact me at (305) 921–0440 or email me directly at Romy@jflawfirm.com.