Probate & Trust Administration

Administration of an Estate

Pfarr & Rethore provides a full range of trust administration and probate services to its clients. Whether someone dies intestate, with a will or trust, every estate needs to be administered. There is a misperception by the public that if assets are jointly held or payable on death to someone else, an administration is unnecessary. However, this is not true.

Who needs to administer an Estate?

Everyone will need to do this at the time of someone's death. Whether it is on the death of the first or last spouse, an administration needs to occur. As an experienced estate planning law firm, we cannot strongly encourage you enough to proceed with a proper administration. More often than not the family needs to address serious personal and financial matters, including issues relating to personal income and estate tax matters, creditor notices and settlement, title transfer of assets, and distribution to any named beneficiaries. The process may be as simple as transferring assets to beneficiaries or to document the new tax cost basis in property to achieve more favorable income tax treatment for beneficiaries. In any event, some sort of administration will always be required. It will just depend on the circumstances as to how extensive it needs to be. There are serious consequences to not doing an administration and failure to do so may be a breach of one's fiduciary duties as Personal Representative of the Estate or Successor Trustee of the trust, which could result in personal liability to you. In short, timing is critical.

What is Probate?

When someone experiences the loss of a loved one, it can be a very difficult time. As if the loss was not enough, add to the grief the prospect of being nominated to handle and close the affairs of that person, making all the decisions that need to get made while being tugged in different directions by everyone from the funeral director to Uncle Henry, and then having to navigate through the court system, this can be quite intimidating.

Probate is the process by which a nominated personal representative or executor, acting in a fiduciary capacity, transfers title of a deceased person's assets to designated beneficiaries. Those beneficiaries are either chosen by the deceased through designation in a will or trust or by intestate succession. In essence, to transfer title of property from the deceased to the beneficiaries, the probate process substitutes a judge's signature to accomplish a transfer of an asset in place of the deceased person. For example, to transfer title to real estate while you are alive, one signs a deed over to another. However, if the owner is deceased, there would be no one to transfer title but for the probate judge's signature.

Further, many people do not understand that, if they accept the appointment to act as personal representative or executor, they become legally responsible to fulfill the directions of the deceased person. They stand in a fiduciary relationship to the beneficiaries. If one fails in this endeavor, they are accountable to the other beneficiaries and could be liable for any civil or criminal prosecution damages. Thus, it is important to secure the deceased's property immediately.

It also is advisable to obtain the assistance of an attorney's office. The attorney who assists you will need the nominated personal representative to initially take the following steps:

1. Order at least ten (10) death certificates from the funeral director;
2. Locate the original Last Will and Testament;
3. Locate veteran's papers;
4. Locate life insurance policies and annuities;
5. Locate the last three years tax returns;
6. Locate a birth certificate and marriage license;
7. Locate real property deeds and any bank statements;
8. Secure estate assets;
9. Keep an accurate record of last illness expenses and burial costs; and,
10. Compile a list of children and beneficiaries including address and social security number, if known.

And, if the decedent was living alone:

1. Remove important documents and valuables to a safe location.
2. Notify utilities and landlord, if applicable.
3. Advise post office where to send mail.

What is Trust Administration?

Trust administration is very similar to probate except it involves a private administration of the affairs of the deceased person and not a public administration through a probate. Often, the timeline to complete a trust administration is shorter than probate because there are less hurdles to overcome as a result of the private administration. Generally, if the assets line up with the trust planning, it will be less expensive than probate. However, there are still many things that need to be done by the successor trustee before the assets of the trust can or should be distributed to the beneficiaries.

Although the needs of each situation will vary considerably depending on the size of the estate and the nature or location of the assets, as well as the distribution plan created by the decedent, and how completely the trust was actually funded (meaning the assets are actually owned by the trust or the trust is the beneficiary), the following will provide some general guiding principals for a successor trustee:

1. A successor trustee is a fiduciary acting for the benefit of the beneficiaries of the trust and estate. Be careful before you do anything especially taking actions that benefit yourself or before distributing any assets. There could be tax implications, creditor claims, or misinterpretation of the trust distribution plan that could subject the successor trustee to personal liability for any adverse consequences;
2. Handle any memorial or funeral arrangement;
3. Order at least 10 death certificates;
4. Locate any original estate planning documents;
5. Begin a list of assets, and beneficiary information (name, address, telephone number);
6. Remove valuables from the residence and store safely;
7. Complete a change of address form with the Post Office to have the decedent's mail forwarded to you;
8. Determine whether it is appropriate to change locks on any property not occupied by the spouse or a primary beneficiary;
9. If you can gain access to the decedent's safe deposit box, do not remove contents until it has been inventoried in the presence of a bank officer - only then should contents be removed;
10. Gather personal records, including checkbooks and statements for at least three years; obtain copies of income tax returns for last three years;
11. Gather all life and accident insurance policies. (Don't forget to check travel clubs, alumni associations, credit card companies, trade associations and any organization that might make life insurance available to its members.);
12. Contact Social Security and VA if applicable;
13. Hold any Social Security checks received after date of death, as benefits paid during the month of the decedent's death will be recalled by the Social Security Administration;
14. Make certain that property and casualty insurance coverage continues on personal effects, automobiles, real estate and any goods in storage; and,
15. Compile a list of all household furniture and furnishings (by major item or category) and take detailed photographs of the contents.

Lastly, call to schedule an appointment with Pfarr & Rethore so that we can help guide you through the administration process. Most people if they are lucky do not have much experience with these types of matters. It, therefore, is important to have the guidance of a professional to assist you with the various responsibilities you have agreed to undertake.

The firm is AV-rated (the highest rating) by the prestigious Martindale-Hubbell Law Directory.