Probate & Trust Administration


Probate & Trust Administration

Both Trust Administration and Probate are legal processes for gathering and assessing the value of the decedent’s assets, paying debts and taxes, and distributing assets to the rightful beneficiaries. In Trust Administration these acts are performed by the Successor Trustee, and in a Probate they are performed by a court appointed Executor or Administrator. The main difference between Trust Administration and Probate is that Trust Administration is usually a private procedure whereas Probate is supervised by the court, and all papers that are filed with the court are a matter of public record.

Probate Administration

If you die with any property titled in your name, there often must be a probate process to manage and ultimately distribute that property. Probate is the state’s legal procedure for handling two major functions for your estate: (1) identification of the rightful heirs to the estate and the share size that each heir will receive; and (2) transferring legal title to the property out of the deceased person’s name and into the name of the heirs. Having a will drawn up in advance of your death will take care of the first function, identification of the rightful heirs and their share. When the decedent did not have a will, the state uses its own formula for determining heirs and their share. But even with a will, the re-titling of your property still must be handled through a court administered probate procedure. The court appoints a personal representative (also called an executor) to take charge of the estate, gather information about the person’s money and property, pay bills and taxes, and distribute the estate to the heirs or beneficiaries.

Trust Administration

If a person has a living trust, and successfully transferred his assets to his trust during his lifetime, then a probate may not be necessary to transfer the decedent’s assets at death. The successor Trustee will take over management of the decedent’s trust assets immediately to pay the decedent’s debts and distribute trust assets to the proper beneficiaries.
Although there is no formal probate, it is still essential that the successor Trustee follow the rules set forth in the decedent’s trust along with state and federal laws. Beyond the specific requirements of the trust, the successor Trustee will have to:

  • notify the trust beneficiaries of their interests in the trust;
  • marshall all of the decedent’s trust and non-trust assets and properly investing the assets during the period of trust administration;
  • obtain proper appraisals of assets.
  • pay the final debts decedents;
  • maintain diligent records and annually provide an accounting to each beneficiary. The successor trustee should also obtain an approval of the accountings from each beneficiary.
  • keep beneficiaries informed as to the process of trust administration, including an estimated time period for completion of trust administration;
  • obtain a tax identification number for the trust;
  • file the decedent’s final personal income tax return (Form 1040) and an income tax return for the trust (Form 1041);
  • file state and federal estate tax returns, if necessary
  • make distributions of trust assets pursuant to the distribution provisions of the trust. The successor trustee should obtain signed receipts for each distribution.

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