What can I do with a short certificate?
When you obtain a short certificate for an estate, what does it empower you to do? The short certificate is the document granted by the Register of Wills in a county to the Executor of an estate. The Executor, having named and granted these “letters of administration” is given power to sell assets belonging to the deceased person, pay their bills in the proper order, list real estate for sale, negotiate with creditors, give notice to beneficiaries and more.
For many people, the first interaction after a loved one’s death that gives rise to the need for a short certificate is the bank. Having gone to the bank to try to get their family member’s bank account they hear that the bank needs this short certificate to obtain the money. Short certificates must be honored by banks, who accept them as proof from a court that you are the designated person to deal with the assets after death and ensure that the creditors are paid. When you take the short certificate in and submit it to the bank, they can give you a check to be placed in an estate account. Often, a bank will offer to open the estate account there if you don’t already have one set up.
Additionally, if listing a house, the realtor will need the short certificate to prove that you have the right to list it. This will also be required at closing when a buyer’s agent will need to see it to verify that you have the proper authority to transfer title to the home. Once again, the short certificate is the only way to prove conclusively that you are the proper administrator of the estate.
Most creditors will accept payment even if you don’t have a short certificate, after all, who doesn’t want to get a check? But short certificates are still important when negotiating with creditors for a lessor claim. In some cases, not all creditors can be paid, and the Executor will be called upon to pay debts in their proper order and to attempt to reasonably compromise some debts to ensure that more creditors are able to get money. Please note that this should be done with the guidance of counsel, as there are several legal issues that can arise if you don’t handle this correctly. Nonetheless, the short certificate is the document that demonstrates your authority to settle the claims on behalf of the estate.
Why is it called a short certificate? What is the short certificate “short” for? Technically, the short certificate is a one-page version of the Grant of Letters, which is a long document issued by the Register of Wills. In most cases, the Registers of Wills don’t even issue these documents anymore. They are kept on file in case one is needed, but the short certificate is all that is used in practice. The “short certificate” is the stand in for the longer court order.
Opening an estate comes with many responsibilities and also empowers the Executor to make decisions on behalf of the estate. But in closing, here’s an important point: opening an estate is not always the right decision. In fact, in some cases it is a major mistake. There are tax consequences to how estates are handled and there can be personal liability on the Executor who opens the estate. Accordingly, it is strongly recommended that you seek legal counsel if you’re thinking of opening an estate for a loved one who has passed away.
If you have questions about these issues, or about how to use the short certificate once you’ve obtained it, call Cornerstone Law Firm for a consultation so that we can help you take your next steps.
