If you’ve been named executor of a loved one’s estate or trustee of their trust, you’ve been given a huge responsibility. Fortunately, you don’t need to go through the process alone.
In its simplest terms, probate is the legal process of settling someone’s estate after their death. It involves paying their debts and distributing their assets to the correct beneficiaries. The length of time the probate process takes to complete will depend on the size of the estate, but most estates can be successfully probated in less than one year.
The steps involved in the process are as follows:
- File the probate petition. This legally acknowledges you as the executor of the estate so you have the authority to handle the necessary probate tasks. The petition is filed in the county where your loved one lived at the time of their death and should be accompanied by a copy of their will and their death certificate.
- Inventory and protect the assets subject to probate. A person’s estate generally includes all personal effects, as well as bank accounts, real estate, stocks, and bonds. Some assets, such as jewelry or antiques, might need an appraisal. Assets should be identified and appropriate steps should be taken to protect those assets.
- Collect payments and satisfy debts. Paychecks, investments, and other income owed to the estate should be collected, and then any outstanding debts should be repaid. If there isn’t enough money in the estate to pay all debts, the law specifies the order in which they must be paid.
- Distribute remaining assets to beneficiaries. Any property remaining in the estate after debts have been repaid must be distributed as outlined in the will or by California’s intestate laws if the individual died with no will. Prior to making distributions, appropriate steps should be taken to protect the Executor or Trustee from claims from beneficiaries, tax agencies, or other interested parties.
- Close the estate. To finish the probate process and be released from your role as executor, you must submit all relevant receipts and records to the court.
About Trust Administration
A trust is a fiduciary arrangement where a third party known as the trustee is given the authority to hold assets on behalf of a beneficiary or beneficiaries. Trusts are often used in estate planning to preserve personal privacy, avoid probate, reduce tax liability, and protect assets.
There are many different types of trusts used in estate planning, and the grantor has a significant amount of flexibility in determining the terms of the arrangement. However, the general steps involved in administering a trust are somewhat similar to those associated with probate.
- Review the trust document. This will help you understand key issues such as who the named beneficiaries are, planned distributions, discretionary provisions, and whether separate shares need to be created. The trust document will also outline your powers as a trustee.
- Secure and value assets. Trusts can include many types of assets, so this task can include inventorying, protecting, and appraising items in the grantor’s home as well as completing account paperwork to title investment and bank accounts.
- Notify creditors, beneficiaries, and tax agencies. When you do this, you should provide your full contact information and details for the attorney handling the trust. Beneficiaries have the right to a copy of the trust document if desired.
- Pay taxes, debts, and associated final expenses. After the grantor’s death, the trust is considered its own tax-paying entity and will need a tax ID number. Funeral and burial costs will also likely be included as an obligation of the trust.
- Distribute assets. Trusts can vary widely in terms of how assets are distributed to beneficiaries. In some cases, there may be one lump-sum distribution. In others, assets may remain in the trust for years, or payments may be made in installments. In all cases, the distribution process should be conducted in a manner to protect the Trustee from any future liability. Claims may come not only from the beneficiary, but his or her successor such as a wife, child, or other family member. Without careful planning, the Trustee may need to defend himself or herself from claims when no trust assets remain to shoulder that cost.
Are You in Need of Assistance With Probate or Trust Administration?
Both the executor of an estate and the trustee of a trust can be held legally liable if assets aren’t distributed appropriately, and conflict between family members can be difficult to resolve without assistance. When you work with The Goralka Law Firm during the probate and trust administration process, you can be confident that your personal interests are protected and that your loved one’s final wishes will be respected. The cost of legal assistance can be paid from the estate’s assets, so there’s no reason not to seek the help you need to ensure that your duties are performed correctly. Contact us today to learn more.