Probate and Trust Administration

When individuals die, whatever worldly possessions they have pass to their heirs. That sounds seamless and effortless, but that’s rarely the reality. If a person leaves a will, the surrogate court must validate that will so that an executor can begin to execute the terms. If a person dies intestate, the surrogate court will approve an estate administrator selected by the known heirs to settle the estate and transfer the assets according to the state’s laws of inheritance. Each process requires great attention to detail.

What Is Probate and How Can You Avoid It?

Probate is a court process by which estate assets are distributed after a person passes away. The probate process can be unsupervised or supervised. In the former case, an appointed estate administrator will manage the assets, repay any debts, file any necessary tax returns and a variety of court documents, distribute the estate’s assets to heirs, and more. In certain situations, such as when concerns have been raised about the administration of the estate, the court may require the process to be supervised. In this case, the probate judge must approve all aspects of the estate’s administration.

Probate can be a long, expensive, and frustrating process. It is also a process that becomes a matter of public record, meaning anyone can obtain information about the decedent’s finances and debts. For these and other reasons, many people seek to avoid the prospect of their estates being probated, and there are a number of ways to accomplish this.

Beneficiary Designations

Transfer on Death (TOD) or Payable on Death (POD) beneficiary designations can be added to bank accounts and deeds.

When possible, beneficiary designations such as these are preferable to joint tenancy because they let you transfer property at your death without sacrificing sole ownership of them while you are alive. Unfortunately, TODs and PODs can complicate the equitable distribution of assets and, if you’re not careful, undermine the stipulations made in your will.

Revocable Living Trusts

A revocable living trust allows you to create a separate entity (the trust) to “hold” title to your assets while you are alive and name a person of your choosing (the trustee) to manage the assets according to terms you choose. As the maker of the trust, you can also serve as the trustee while you are alive, but upon your disability or death, the individual you chose as your successor trustee will continue to manage or distribute the trust’s assets. A properly drafted and implemented trust can accomplish many goals, including probate avoidance, streamlining the distribution of assets, and protecting your heirs’ inheritances against divorce and/or creditors.

However, even though trusts can be powerful tools, they must be properly administered to be effective. Proper administration can include the notification of beneficiaries; the gathering, valuation, and management of assets; notification of creditors; payment of debts, final expenses, and taxes; and the distribution of remaining trust assets to heirs according to the mandates of the trust. But accomplishing all of this takes a great deal of time, and the successor trustee can be held responsible for failing to administer the trust properly. That’s why many of our clients choose to work with our firm, which can help guide them every step of the way and ensure their trusts are managed properly.