Probate Or Trust Administration?
The loss of a loved one comes with many unexpected challenges. Losing a beloved relative or friend can be overwhelming, and the process of handling their affairs in the wake of such a loss only adds to the stress. Many families are eager to tie up loose ends and distribute the assets of the deceased. To do so, formal probate or Trust Administration will need to occur.
For those not familiar with the term, probate refers to the legal process required to distribute the assets of the deceased. During the probate process, a representative is authorized to pay debts and distribute assets on behalf of the deceased. This can be accomplished by Trust Administration or formal probate.
Probate isn’t always necessary. If the deceased’s assets were properly funded into a living trust so that he or she died without any assets in their individual name, a trustee can distribute assets accordingly without probate and court involvement. This is the preferred route for many individuals, as the formal probate process comes with some downsides. Probate is a matter of public record, so if you’re especially private, seeing your family’s affairs publicized can be frustrating. The process can also be lengthy, with many months passing before the court approves the final distribution of assets. Expensive, time-consuming, and potentially public, it’s no wonder probate has earned such a bad rap.
However, for some decedents and their families, formal probate can be helpful. If the decedent had a lot of outstanding debts at the time of death, a formal court proceeding with oversight of the personal representative and supervision of all probate proceedings by a judge is a great way to get a final ruling by a judge that all debts have been satisfied. Formal probate can also be helpful if there is the anticipation of family conflict. Having a neutral third party overseeing the proceedings and the actions of the appointed personal representative can give family members peace of mind that everything will be conducted in an honest and legal way.
Trust Administration is an option worth considering if your situation allows for it. Usually a quicker process than probate, Trust Administration involves less paperwork and is often more affordable for the client. In some cases, court appearances are unnecessary during Trust Administration, saving families valuable time and money.
Understanding the difference between Trust Administration and formal probate is critical to the estate planning process. Talk with your loved ones about your hopes for the future.
Make plans to ensure your wishes are respected with the help of an estate planning attorney. It’s the best way to protect your family, friends and all you’ve worked towards.
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