Estate and Trust Administration

Providing families legal expertise for tax planning for over 25 years.

Estate and trust administration

After a person dies, his or her estate must be administered, including paying the creditors, filing the will, taking an inventory of the property, paying the taxes, notifying the beneficiaries and distributing the assets. The process of handling a decedent’s estate is called estate administration. The decedent’s estate may be administered through the probate process if he or she died with a will or died intestate. If the person established a trust, the assets will be handled through a trust administration.

Probate process

Before a will can be implemented, the court must prove it is valid, this is the definition of “Probate”. Many people who draft wills name designated people to serve as personal representatives. If a personal representative is not named, the probate court may appoint one or the family can petition for a particular individual to be named to serve in the role. Some people who are named as personal representative are not comfortable with all of the tasks that the position requires and seek guidance from a probate lawyer. Under Florida Law, a personal representative must retain a lawyer to begin the probate process.

Personal Representatives have many responsibilities. They must file the will with the probate court that has jurisdiction, typically the county where the decedent died. The court will then make a determination about whether or not the will is valid. In some cases, an interested party may challenge the validity of a will in whole or in part. If that happens, the issue may be litigated until the court makes a final decision. Once a will is found to be valid, the personal representative will then be tasked with administering the estate according to the will’s provisions. Before distributing the assets, the personal representative will first have to notify the creditors and the beneficiaries. 

The creditors may make claims against the estate, and the personal representative will be responsible for paying them out of the estate’s assets. Personal representatives must also take a complete inventory of all of the assets held by the estate. Anything that was left out of the will must be passed separately according to the state’s intestacy laws. After the creditors, attorneys, accountants and others have been paid for their expenses incurred during the probate process, the personal representative will distribute the assets to the named beneficiaries. Personal representatives must follow the testator’s wishes about how the assets should be distributed. Probating a will can take a lengthy period of time especially if the estate is large. Most states do have expedited processes available for smaller estates that do not contain real property.

When a person dies without a will: Intestacy

Some people fail to write wills or establish trusts before they pass away. When they die, they are said to have died intestate. Each state has its own intestacy laws that govern how assets are distributed when there is no known will or trust. When someone dies intestate, the probate court will appoint someone to serve in the role as the estate’s administrator. The estate administrator will be tasked with handling all of the decedent’s financial affairs, including notifying creditors and potential heirs, taking an inventory of the assets, paying the creditors, taxes and any associated fees and costs and finally distributing the assets according to the intestacy laws of the state.

The court will normally ask the surviving spouse if he or she wants to serve as the administrator. If that person does not, the court might then ask the next of kin, or it may appoint an estate administrator. How the assets will be distributed will depend on what the laws outline. The assets are not distributed until all of the debts and other expenses have been paid. The remainder is finally distributed to the heirs.

Trust administration

During a person’s lifetime, he or she may choose to establish a trust. Trusts may be revocable or irrevocable. When the person dies, revocable trusts are transformed into irrevocable trusts, meaning that they cannot be changed. Trusts may be established for a number of purposes. Some people set up special needs trusts to provide care for individuals who are disabled so that they will not lose their disability benefits, including but not limited to Medicaid.. Others include trusts within their wills or revocable trusts to protect their assets from future generations in the event of divorce or from creditors.

 

Trust assets do not have to be supervised by the probate court. When a person establishes a trust, he or she may name a trustee to administer it after death. Trustees owe fiduciary duties to the trust beneficiaries to manage the assets of the trust in a way that benefits them. This includes investing the assets in the same manner as a prudent investor. Many trustees choose a professional or an institution to assist them to meet this requirement.. The trustee will also distribute assets from the trust as designated by the provisions of it. The grantor may designate many different scenarios of distribution. For example, a trust may be written that withholds distributions until a triggering event occurs such as the beneficiary reaching a certain age or graduating from college. The trustee has a responsibility to manage the trust assets solely for the benefit of the beneficiaries and may not commingle his or her own funds and assets with those held by the trust. When determining who to name as a trustee, some people choose a trusted friend or family member. Others instead choose an attorney, bank or trust company to act as the trustee.

 

When people are planning their estates, it is important for them to decide who to designate as a trustee or an executor. Because some people are uncomfortable with all of the complex legal and financial tasks that are involved, trustees, or other fiduciaries, may want to consider seeking guidance from experienced probate and estate lawyers.  In addition, many states have requirements or restrictions on who can act as Personal Representative or Trustee. To learn more about how we might be able to help, schedule your consultation today.

Different techniques we can implement/include

  • CRNT
  • CRAT
  • IDGT
  • QPRT
  • GRAT
  • FLP
  • GST
  • Bypass/CST/QTSP
  • IRA Trusts

Thomas & Pinnacoli Law

Estate Planning & Administration, Tax & Elder Law Firm

 

Florida

27 SE Ocean Blvd
Stuart, Florida 34994
United States

Tel: (772) 324-5656
Fax: (772) 210-1272

Pennsylvania

415 Wyoming Avenue
Scranton, PA 18503
United States.

Tel: (570) 963-8880
Fax: (570) 963-9372