Probate / Estate & Trust Administration

Trust Administration

Most people become involved with the probate of an estate at some time during their life. Involvement may result from being named the executor of an estate or may be the result of being named a beneficiary or heir of an estate. Along the same lines, many people become involved in trust administration as either a trustee or a beneficiary. Regardless of the reason for your involvement, a basic understanding of probate and trust administration process is essential.

The Probate Process

If you do not have a plan, your state has one for you, but you probably will not like it. When an individual dies, assets owned by the decedent make up the decedent’s estate. At your death: If you die without an intentional estate plan, your assets will be distributed according to the probate laws in your state. Probate, also referred to as estate administration, is the legal process used to identify, locate and value those assets as well as to transfer assets to the intended beneficiaries or heirs of the estate.

The probate process has disadvantages. Your estate and the value of your assets will become public record. Also, because lawyer’s fees and executor’s commissions are based on a statutory fee schedule, a probate may cost more than the management and distribution of a comparable estate under a living trust. Time can be a factor as well. A probate proceeding generally takes a minimum of seven to nine months and can linger for years, longer than the administration of a living trust.

There are a number of steps that must be taken between death and distribution of assets. Though each estate is unique, common steps found in the probate of most estates, include:

  1. Filing of a petition with the appropriate Probate Court.
  2. Notice to beneficiaries, heirs, and creditors of the estate.
  3. Executor/Administrator appointed.
  4. Inventory and appraisal of estate assets by Executor/Administrator.
  5. Claims filed by creditors and reviewed by Executor/Administrator.
  6. Payment of approved claims. Assets may need to be sold if the estate lacks liquidity.
  7. Preparation and payment of estate taxes.
  8. Final distribution of assets to beneficiaries and/or heirs.

Unfortunately, probate is unpredictable. That is why many people choose to avoid it. Given the choice wouldn’t you prefer these matters be handled privately by your family, not by the courts? Wouldn’t you prefer to keep control of who receives what and when? And, if you have young children, wouldn’t you prefer to have a say in who will raise them if you can’t?

Trust Administration

Trusts are divided into two basic categories — testamentary trusts and living trusts, with the difference being that the former doesn’t become effective until the death of the trust creator while the latter takes effect when the legalities of creation are satisfied and sufficient funds are transferred in to fund the trust. Regardless of the type of trust chosen, a trustee must be named when the trust is created. The trustee is responsible for administering the trust once it becomes active.

The duties and responsibilities of a trustee, include at incapacity:

  1. Oversees care of ill person
  2. Understands insurance benefits and limitations
  3. Looks after care of any minors and dependents
  4. Applies for disability benefits
  5. Puts together team of advisors
  6. Notifies bank and others
  7. Transacts necessary business
  8. Keeps accurate records and accounting

The duties and responsibilities of a trustee, include at death:

  1. Contacts attorney to review trust and process
  2. Keeps beneficiaries informed
  3. Puts together team of advisors
  4. Inventories assets, determines current values
  5. Makes partial distributions if needed
  6. Collects benefits, keeps records, files tax returns
  7. Pays bills, does final accounting
  8. Distributes assets to beneficiaries as trust directs

If the responsibilities become too much, people often choose to appoint an attorney as trustee or retain the services of an attorney to assist the trustee in the administration of the trust.

The probate and trust administration attorneys at Sowards Law Firm can help navigate the often complex probate system and/or assist with the administration of a trust. Sowards Law firm is honored to represent clients in Santa Rosa, Pleasanton, and throughout the State of California. To schedule an appointment to discuss your probate and trust needs, contact the firm today by calling 408-371-6000.