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Administration of Small or Insolvent Estates

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By Shannon Laymon-Pecoraro

Many people do not understand the complexities involved in administering a decedent’s estate. Estate administration can be even more problematic when the estate is relatively small. As a result, one of the first things we assess when meeting with a new client is the size and solvency of the estate.

An estate valued below $50,000 is, by statute, a small estate in the Commonwealth of Virginia. Although the probate of a will is still required, qualification of a personal representative is not necessary. Instead, the successors to the property of the estate may claim property via an affidavit that attests to a certain set of facts, including the value of the property.  The important thing to note is that, although the small estate affidavit should make the administration simpler, the claiming successor(s) of any property has a duty to safeguard and promptly pay or deliver the small asset as required by the laws of the Commonwealth.

The problem associated with the small estate affidavit resolves around the payment of estate assets as required by law. The Virginia Code outlines an order for which debts are to be paid, and a failure to abide by that order could result in personal responsibility for the debt. When an estate, whether small or large, has assets that are insufficient to cover the full extent of the liabilities, then each liability must be properly assessed and if one level of priority cannot be fully paid, then the liability of that priority must be paid pro rata.

A number of clients in recent years have promptly qualified on insolvent estates and started to negotiate payments with vendors, often paying creditors out of the order of priority. Although there were no ill intentions, the personal representative, as a result of the incorrect payments, was held personally responsible for the errors.

Before rushing to the court to qualify as Executor or Administrator, you should meet with someone who can discuss the particular circumstances of the estate. This will not only provide for efficient administration, but can limit your personal liability.

 

Kit KatAsk Kit Kat – Why Curly Hair?

Hook Law Center: Kit Kat, what makes hair curl in sheep?

Kit Kat: Well, this is interesting.  There have been two competing theories for quite some time. New research indicates that neither is completely correct. Researchers in New Zealand and Japan have recently published their findings in the Journal of Experimental Biology. What they have determined, however, is that differences in certain types of cells are interacting to make  hair curly. They are not just not sure how the interaction works. They are interested in solving the mystery, because it may shed light on why human hair is curly in some and not others. Human hair has more complex tangles, unlike sheep hair, so sheep were chosen for the study. All will give us more information on how species have adapted over time.

The first theory postulates that a curly strand of hair has cells on one side (orthocortical cells) that divide more quickly than the other type of cells (paracortical cells). Orthocortical cells tend to be longer than paracortical cells. Therefore, the curve of the curl would be determined by the ratio between the two types of cells. This theory was debunked when they discovered there was not a difference in the number of cells inside the curve v. outside the curve.

The second theory revolved around the issue of cell length. Orthocortical cells do tend to be longer than paracortical cells, but there is a great deal of variation in the lengths, so there was not reliable standard to say that the ratio always works in a certain way. As Dr. Duane Harland, one of the scientists conducting the study, commented, “You could not say that having 60% orthocortical cells and 40% paracortical cells will always lead to a 15-degree curve.” What they did find, however, is that in general, on any given strand of hair, an orthocortical cell will always be longer than any paracortical cell. So, there is some link between the two types of cells. Further study will have to determine what that relationship is. (Veronique Greenwood, “What makes Some Hair Curly? Not Quite What Scientists Thought,” The New York Times, Science section, March 22, 2018)

 

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

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Posted on Monday, April 9th, 2018. Filed under Senior Law News.
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