Question: My mother passed away with no assets, no Will, and no estate. However, she was apparently the beneficiary of my deceased brother’s life insurance policy, and they’re contacting us about a distribution to her estate. I don’t have the money for a lawyer up front but could pay them using the distribution. Is that possible? Is a lawyer necessary for this, or could I do it on my own?
Loraine’s Answer: Yes, you CAN try to open your mother’s estate for administration (or you might be able to do a Petition for No Administration necessary instead of opening her estate) without using an attorney. However, NOT using a probate attorney to help with a probate or estate administration matter often leads to more costs and delays than using an experienced probate attorney in the first place does, so I really don’t recommend it.
I don’t know of any probate attorneys who will do the work first and take payment later, but there may be some out there. You won’t know unless you call around and ask. While you’re at it, you may also want to ask how the attorney charges for probate work and ask if they accept credit cards for retainer payments or fixed fee payments. A credit card may be a way for you to get the work started until you can get the insurance proceeds.
Please note: if your mother had significant debts, it is entirely possible for the debts to take up any money her estate receives. In that case, if you open her estate for administration, you may be able to pay the attorney (or reimburse yourself for attorney’s fees that you paid up front) before all the debts are paid, and you, if you serve as the administrator of the estate, may be able to pay yourself a fee for serving in that role (which will be ordinary income to you), but you and any other heirs may end up receiving little or nothing as heirs. This is because creditors of an estate get paid before heirs or beneficiaries do. So, you may want to try to figure out if your mother had debts at the time of her death, and, if so, how much debt she had, before you proceed with opening any estate for her. If her estate appears likely to be insolvent, even with the insurance proceeds taken into account, it may be better to just walk away, without opening the estate. An experienced probate attorney should be able to help you determine whether it’s even a good idea to open the estate.
Estate Planning Takeaway: It’s usually wise to engage an experienced probate attorney to assist with opening an estate for administration, even if the deceased person had few assets. However, if the person had a lot of debts at the time of their passing and the value of the debts may exceed the value of the assets, it may be better for would-be heirs to walk away.
This “Q&A with Loraine” blog series is inspired by answers from Morgan + DiSalvo Partner Loraine DiSalvo to actual user questions posted by individuals on www.avvo.com. This blog is a more in-depth response than can be given on their site under their character limits for answers. To view the original question and Loraine’s original response, click here.
