Trust Administration & Probate

When a loved one passes away, their assets and property are typically distributed to their heirs or beneficiaries. This process is known as probate or trust administration, depending on the type of estate plan that was in place. In this article, we will explore what probate and trust administration are, how they work, and the differences between the two.

Probate

Probate is the legal process through which a person’s assets and property are distributed after their death. If the deceased person had a will, the probate court will review the will to ensure that it is valid and that the deceased person’s wishes are carried out. If the deceased did not have a will, the court will follow state law to distribute the assets.

During probate, the court will appoint an executor or administrator to manage the estate. The executor or administrator will be responsible for identifying and valuing the deceased’s assets, paying any outstanding debts and taxes, and distributing the remaining assets to the heirs or beneficiaries.

Probate can be a lengthy and costly process, with substantial court fees, legal fees, and other expenses reducing the value of the estate. Additionally, probate proceedings are a matter of public record, which means that anyone can access information about the deceased’s assets, debts, and beneficiaries.

Trust administration is a process that occurs when a person passes away with a trust in place. In this case, the trustee will be responsible for managing the trust and distributing the assets to the beneficiaries.

The trustee will review the trust document to determine how the assets should be distributed. They will also be responsible for identifying and valuing the assets, paying any outstanding debts and taxes, and distributing the remaining assets to the beneficiaries.

Trust administration is typically faster and less expensive than probate, as there is no need for court involvement. Additionally, trust administration is a private process, which means that information about the assets, debts, and beneficiaries is not made public.

Differences between Probate and Trust Administration

There are several key differences between probate and trust administration. One of the biggest differences is the involvement of the court. In probate, the court oversees the distribution of assets and appoints an executor or administrator to manage the estate. In trust administration, the trustee is responsible for managing the trust and distributing the assets.

Another key difference is the timeline. Probate can be a lengthy process, often taking months or even years to complete. Trust administration is typically much faster, as there is no need for court involvement.

Cost is also a consideration. Probate can be expensive, with court fees, legal fees, and other expenses reducing the value of the estate. Trust administration is typically less expensive, as there is no need for court involvement.

Privacy is another factor to consider. Probate proceedings are a matter of public record, which means that anyone can access information about the deceased’s assets, debts, and beneficiaries. Trust administration is a private process, which means that information about the assets, debts, and beneficiaries is not made public.