The Personal Representative must pay the Homestead Allowance, Family Allowance and Exempt Property before all other claims, including creditor claims, debts, taxes and costs of probate. You can watch a very short presentation on the Special Protections for Family Members.
If there is not enough property in the estate to pay all of these special payments, pay the Homestead Allowance first, pay the Family Allowance second and the Exempt Property next. Even if the person who died made a will that disinherited the spouse or children, the Personal Representative needs to pay the allowances and exempt property out of the estate. The spouse and children may disclaim their interest in receiving any allowances and exempt property, and would need to file a document with the court stating this.
After paying the allowances and exempt property, pay the creditor claims. Once those are paid, you can make distributions. If you are sure that there is enough property in the estate to pay Allowances, Exempt Property, and creditor claims, you can transfer property at any time to the persons who are supposed to receive it. If you are not sure, you should wait until you have paid these before transferring any property. You must complete all distributions or make arrangements for future distributions before you close the probate.
Before you transfer property, you may choose to send a Proposal for Distribution to the interested persons affected by your planned distributions. A person has 30 days from the date of mailing (if you mail the Proposal) or the date of delivery (if you hand-deliver the Proposal) to object to the kind or value of the property that he or she will receive. If the person does not object within this time period, he or she cannot object later. A Proposal for Distribution is not necessary but if the probate has been contested or there has been little communication between the Personal Representative and the beneficiaries or heirs, it may be a good idea.
You can file:
Final Accounting and Proposed Distribution, P-380
A Proposal for Distribution should say the following:
Mail by first-class mail or hand-deliver the Proposal to all persons you name in the Proposal, as well as any other interested persons who the Proposal might affect.
You must transfer title of each item of property to the person who is supposed to receive the property under the Will or through intestacy. The process is different for each type of property and may involve things such as preparing a new deed, changing the account title or giving the person a Deed of Distribution that proves he or she is the rightful owner. For information on how to transfer specific types of property, see Transferring Assets.
Yes. It is a good idea to have each person who receives estate property sign a document called a "Receipt and Release." This document confirms that the person did in fact receive the property and accepts it as his or her rightful share under the Will or through intestacy. It also reduces the risk of later disputes when you close the estate.
Receipt and Release, P-385
You should file all original Receipts and Releases with the court when you close the estate.
If someone does not want property from the estate, he / she needs to file a disclaimer.
A person "disclaims" property when he or she refuses to accept it after the person dies. A disclaimer is only valid if a person makes it before receiving or controlling the property. The person must describe the property in writing, sign the disclaimer and file it with the court or deliver it to the Personal Representative.
This is a disclaimer made within nine months of the date of the person's death. It is "qualified" because the IRS does not treat you as the owner of the property for estate and gift tax purposes.
As a general rule, it passes as if you died before the person who died either by intestacy or under the person's Will. But the rules are complicated and this is not always the case. If you want to make a disclaimer, it is a good idea to talk to a probate lawyer.
Yes. You can hold back a reasonable amount of property to cover final costs such as accounting fees, lawyer fees or a final tax bill. If you close the probate by filing a Sworn Statement of Personal Representative Closing Estate, you should include the amount you plan to hold back, the purpose of the amount and your plan to distribute any remaining property after you pay the final costs. When filing a Sworn Statement, it is a good idea to have the persons who are affected by the amount you are holding back agree to your plan in the Receipt and Release. If you close the probate formally, you should ask the court to approve the amount that you want to hold back, the purpose of the amount and your plan to distribute any remaining property after you pay the final costs.
Generally, no. The beneficiary or heir will receive the gift of property made before the person's death and the property inherited after death.
But the share of the beneficiary or heir will be reduced if one of the following applies:
If a gift of property made before the person's death reduces the share of the beneficiary or heir, the property is valued at the time the beneficiary or heir received the property or on the date of the person's death, whichever comes first.
You must subtract the debt from the value of the property. For example, if a child owed money to a parent before death but did not pay the loan back, you must reduce the amount passing to the child under a Will or through intestacy by the amount of the debt.
You must give the property to a person authorized to accept the property, such as the person's parent, Guardian or Conservator. If you have any questions about who is authorized to accept the property, you should talk to a probate lawyer.
If you cannot find a beneficiary, heir or claimant and the missing person has no Conservator, you must transfer the property to the state of Alaska.
If a beneficiary, heir or claimant thinks that property wrongly passed to the state of Alaska, that person may be able to get the property back if he or she acts promptly. It is a good idea to talk with a probate lawyer if property must pass or has passed to the state of Alaska.
No. If the person who died left the property in his or her Will specifically to someone, the property passes with the loan still in effect unless the Will says differently. You can always pay off a loan, such as a mortgage on a home or the loan on a car, if it is in the best interests of the estate. But the share of the person who is supposed to receive the property does not increase if you pay off the loan with estate property.
If the Will does not say differently, distributions are paid in a specific order. Distributions are sorted into classes called "gifts" and each class has a different right to payment. You must make all gifts in the class with the highest priority first. If there is enough estate property after those gifts are made, you can move to the next highest class and make those gifts. If there is not enough property to make all gifts in a certain class, you must make partial distributions by applying the same percentage to all gifts in that class. After that, you cannot make any gifts in classes with a lower priority.
A properly prepared Will should direct how all of the property of the person who died passes. But if it does not, any property not included in the Will passes to the heirs of the person who died through partial intestacy (as if there was no Will). This type of property is the last to be distributed if there is not enough property to make all of the gifts under the Will. Read about what happens to property when there is no Will.
Yes. Persons who inherit property under the Will or through intestacy can change their shares, the amount and the types of property they are supposed to receive if all persons affected by the change agree in writing. The Personal Representative must transfer the property in the way the persons have agreed. However, the agreement cannot affect the rights of creditors or persons with another right to the property.
Yes, if it has been less than three years since the person died or one year after the property was distributed, whichever is later. If the Personal Representative asks, the person who received the property must return the property and any income the property earned. If the person no longer has the property, the person must return the value of the property and any income the property earned as of the date he or she disposed of the property.
Yes. If the person who sold or borrowed against the property had title to the property or a Deed of Distribution from the Personal Representative, another person who bought or loaned money in good faith has no responsibility to the estate or the person who owned the property. For example, if a bank loans money to a person who received real property from the estate in exchange for a Deed of Trust but it turns out that the real property was not distributed correctly, the bank does not lose its rights in the real property.
If another state handled a probate case and there is estate property in Alaska, the personal representative appointed in the other state (called a domiciliary foreign personal representative) can administer property in Alaska by filing:
The Alaska court can only appoint a domiciliary foreign personal representative if there is no probate case pending in Alaska. Once appointed, the domiciliary foreign personal representative has all the powers of a local personal representative. It is called Ancillary Administration when the foreign personal representative is acting to collect property in Alaska.
The judicial officer will issue an order an Order Recognizing the Authority of Domiciliary Foreign Personal Representative to Act in the State of Alaska, P-313. Once the court appoints the foreign personal representative, he or she can distribute the property. Read this section to learn more about distribution of estate assets and also read about transferring ownership and title.
You can learn more about the:
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