Estate & Trust Administration

Estate Administration (Probate)

When a loved one passes away, their estate may be subject to “probate.” Probate is the court-supervised process of settling a person’s estate and wrapping up their affairs. Probate may be required regardless of whether the deceased person had a Will or not. If the deceased person did not have a Will, state law will govern who will receive the assets under what are called the “intestacy” laws. The intestacy laws are very specific regarding who can administer the estate; who will inherit from it; and how much they will receive. It cannot be assumed that everything will automatically pass to the surviving spouse or immediate family of the decedent.

There are multiple methods to probate an estate, depending on the value and nature of the assets and circumstances relating to the estate. We help personal representatives identify the appropriate steps to follow to ensure proper and efficient administration of the estate.

Not all of the decedent’s property may be subject to probate, however. Generally, property the decedent owned individually or as tenant-in-common must be probated. On the other hand, property jointly held with a right of survivorship, property which passes by beneficiary designation and property held in trust are typically not subject to probate.

As part of the probate process, if the decedent had a Will, the original must be filed with the local Register of Wills in the county where the decedent lived. If the decedent owned property out-of-state, ancillary administration may be required where the property is located. Even if the personal representative is named in the Will, they are not authorized to act until they are officially appointed by the appropriate Register of Wills office.

After being appointed, the personal representative (sometimes referred to as an executor or administrator) is required to marshal the estate assets and prepare and file an inventory. The timeframe for this important step is set by statute. The inventory should detail and value all of the assets subject to probate. Appraisals are often necessary to value assets. The inventory provides both potential beneficiaries and creditors of the estate an idea of the estate’s assets and value.

The personal representative is responsible for the care and maintenance of estate property, treating it with even greater care than his or her own property. In the meantime, the personal representative must keep the administration process moving along by giving proper notice to beneficiaries and creditors and settling claims against the estate. Additionally, the personal representative will comply with any tax requirements on behalf of the decedent and his or her estate. The law imposes certain rights and restrictions on personal representatives and their right to dispose of or sell certain assets. After claims and expenses of the estate are satisfied, the personal representative must file a detailed accounting with the Register of Wills, reflecting additional assets received by the estate, and claims and expenses paid. Beneficiaries of the estate are afforded a statutory period of time to object to the accounting. If the objection period expires, the Court will review the accounting.

Any distributions provided in the Will, or required by statute, should be paid to the beneficiaries after all claims and expenses are satisfied and the accounting is approved.

As you can see, being a personal representative is a significant responsibility. If a personal representative does not perform their responsibility appropriately, they could face potential liability.

Procino-Wells & Woodland, LLC works closely with our clients to provide the guidance necessary to assist personal representatives in completing the estate administration process and to protect them from claims by the estate beneficiaries.

Trust Administration

Trust administration refers to the management of trust property according to the Trust document’s terms and for the benefit of the beneficiaries upon the death of the person who created the Trust. Many steps are required to safeguard effective administration and thus, it is smart to work with an attorney to help facilitate the process for the Trustees throughout the process.

A Trustee has a fiduciary relationship to the beneficiaries of the Trust, which means that the Trustee has a heightened obligation to care and maintain trust property, treating it with even greater care than his or her own property. In fulfilling his or her fiduciary obligation, the Trustee must comply with the terms of the Trust, as well as governing state law.

While Trusts are often created to avoid probate and simplify the process of passing assets on from a decedent to their loved ones at their death, the Trustee must be well-informed in order to properly administer the Trust. Not all Trusts are the same. Trusts are established for various reasons and it is important for the Trustee to thoroughly understand the purpose and intent of the Trust in order to provide the protections intended by the Grantor. For instance, if a Trust was established to protect the public benefits of a special needs beneficiary, it is important that the Trustee be familiar with the laws that control the beneficiary’s benefits so that distributions from the Trust do not jeopardize the beneficiary’s eligibility. If the Trust is named as the beneficiary on a tax-qualified account, such as a traditional IRA, the Trustee must comply with strict timelines to avoid serious income tax penalties and consequences.

Procino-Wells & Woodland, LLC has the experience, knowledge and expertise to advise Trustees through the Trust administration process. In addition, some clients appoint us as their Trustee to administer their Trusts upon their disability or death, rather than an interested relative or friend. When clients appoint us as Trustee, they know that we will professionally, impartially and efficiently administer their Trust, relieving their loved ones of that burden and minimizing the risk of conflict among their loved ones.