When a person dies, someone will need to wrap up the decedent's affairs, which includes managing the distribution of the person's property after death. If the person who died had a living trust, and the assets were properly titled, no probate will be needed. On the other hand, if the person held property outside of a trust, then a probate administration may be necessary to administer the estate. While there are many similarities between these two processes, there are important differences as well.
In a trust administration, after the death of the settlor (the trust creator), the trustee will first review the trust to see what is required (who gets what and under what conditions). Then he or she will notify the beneficiaries, heirs, and certain agencies of the death.
The next step is to start gathering and valuing the assets. The trust will usually have a “Schedule A” or similar document that lists the trust assets. This will help the trustee locate the assets and ensure they are distributed according to the directions in the trust.
Finally, the trustee will need to distribute the assets according to the trust instructions and provide an accounting to the beneficiaries. Assuming it all goes smoothly, there should be no need to go to court. However, if a dispute arises, petitioning the probate court to help resolve it is always an option. Fees for the trustee and the trustee's attorney are usually paid from the trust at an hourly rate, based on the amount of work necessary to complete the process.
If the value of the estate is over $150,000, someone will need to file a petition for probate with the court. The court will appoint a personal representative (aka executor/administrator) to represent the estate. This person will perform many of the same functions as a trustee, discussed above. The main difference is that all of his or her actions will be under the supervision, and subject to the approval, of the court. Additionally, in probate, fees for the attorney and personal representative are based on a percentage of the value of the estate. This often means a larger fee than for a trust administration.
If the value of the estate is $150,000 or less, simplified procedures are available without the need for a full probate of the estate. For instance, if there is a bank account with a small amount of money, a signed affidavit delivered to the institution might be enough to collect the funds.
The difference between a trust administration and probate illustrates the importance of executing an effective estate plan prior to death. A properly funded living trust can avoid the need for probate and keep things much simpler for your loved ones.
Helix Law Firm can help with probate and trust administration
Whether the decedent left a living trust, just a will, or nothing at all, we can help negotiate the process of estate administration.
If you're interested in learning more about how Helix can help, please call us at (619) 567-4447 to schedule a free consultation.