Trust Administration & Probate Definitions
WHAT IS TRUST ADMINISTRATION & PROBATE
What is Trust Administration?
Trust Administration is the process of carrying out the wishes and plans of the creators of the trust (called a trustor) when the creator of the trust either has become incapacitated or has passed away. When a trust is created, the creator of the trust specifies how their assets and property are to be distributed at the time of their death. The trust will also specify a “trustee” (typically either a family member or an attorney) who will carry out the wishes of the trustor.
The trustee will be responsible for a myriad of aspects of the trust administration, including, but not limited to: providing notice and copies of the trust to all beneficiaries and heirs, notifying appropriate state agencies, filing a final tax return, establishing a trust administration bank account to collect assets, mediating disputes between beneficiaries and family members, and other requirements specified in the trust instructions.
The success of the trust administration process can be directly traced to the quality, applicability, and relevance of the estate planning documents at the time when the trust was created.
What is Probate?
In legal terms, Probate is the judicial process whereby a Will is “proved” in a court of law and accepted as a valid public document that it is the true last testament of the deceased, or whereby the estate is settled. Probate also occurs when there is no Will and a probate court must decide how to distribute the assets of the deceased’s estate to their heirs.
The role of the probate court is to make sure that the deceased person’s debts are paid and assets are allocated to the correct beneficiaries. The Grant of Probate is a document that allows ownership of the assets to be transferred from the deceased to the executors so that they can give effect to the terms of the Will.
Probate is important because if you don’t apply for it, the Beneficiaries will not be able to receive their inheritance. Instead, the deceased person’s assets will be frozen and held in a state of limbo. No one will have the legal authority to access, sell, or transfer them.
There are multiple legal ways to avoid going through the probate process. These include writing a Living Trust, naming beneficiaries on your retirement and bank accounts, and holding property jointly.
To learn more about Trust Administration, Probate, and Living Trusts, contact us to request a Free Consultation.