Probate & Trust Administration
Probate is the legal process through which a deceased person’s estate is properly distributed to heirs and designated beneficiaries, in addition to any debt owed being paid off to creditors. In this case, a personal representative, usually a trusted family member or a close friend, is in charge of administering an estate.
Also called an executor in many states, the personal representative is tasked with numerous duties to ultimately transfer property from the decedent’s estate to the heirs. In addition the personal representative must make sure that taxes and creditors are paid before assets are distributed to beneficiaries.
The Duties of a Personal Representative
The duties you undertake as a personal representative include:
- Opening the estate upon appointment by the court
- Gathering and valuing your loved one’s assets
- Filing an inventory of assets
- Publishing a notice to creditors
- Paying viable debts owed by your loved one
- Filing your loved one’s final tax return
- Paying state and federal taxes, including estate taxes (if any)
- Closing accounts
- Distributing remaining property according to the will’s provisions
- Closing the estate
Types of Probate Administration
Estates may be administered through a variety of processes, depending upon specific factors.
- Formal administration— Most estates require formal administration, which involves close supervision by the probate court during each phase. Even if not necessary, you may choose formal administration under certain circumstances.
- Summary administration— The estate may be eligible for this expedited form of probate if the estate assets are less than $75,000.
- Ancillary administration— An estate being administered in another state, but that includes property in Florida is subject to ancillary administration to properly deal with the Florida assets.
Non-Probate Assets vs. Probate Assets
Your will governs only “probate” assets, which are assets owned in your sole individual name, with no designated beneficiary. You might have other assets that will pass at your death by other means. Some ways by which non-probate assets can pass at death include:
- If assets are held in trust, the trust’s terms will govern their disposition;
- Retirement plans and insurance policies will be governed by the appropriate beneficiary designation; and,
- Real estate may be jointly owned.
Your loved one may also have created an inter-vivos trust during her or his lifetime or a testamentary trust through their will. The person or institution named as trustee is responsible for administering this document. We help you to effectively carry out your duties as a personal representative or trustee.
The main difference between trust administration and probate is that trust administration is not a court-supervised process. When a person dies, leaving a valid trust, a trust administration becomes necessary to carry out the wishes according to provisions outlined in the trust document.
Probate is generally not required if the decedent had a properly drafted and funded trust. Nonetheless, the successor trustee must take certain steps to administer the trust.
These steps include:
- Contacting beneficiaries and keeping them informed;
- Gathering and investing the trust-maker’s assets;
- Notifying potential creditors;
- Paying debts;
- Filing tax returns; and,
- Distributing assets and/or income to beneficiaries in conformity with the trust’s provisions.
The Need for a Thorough List of Assets
To help understand how your probate and non-probate assets will pass at your death(s), you should have a thorough list of your assets. The type of list that is needed for estate planning is usually quite different than a personal financial statement you might have filled out for other reasons. We suggest that you create a summary that lists:
- Each asset in detail;
- The value of each asset;
- The ownership structure, which will govern where the asset goes after your death; and,
- The desired recipient at your death.