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Probate Estate and Trust Administration

Probate Estate administration is the process of handling a person's assets, through the court system, after the person passes away. If a person has set up a Trust, Trust Administration is the process of handling the trust's assets in accordance with the rules of the Trust Agreement, usually without court supervision.

Probate Administration

When a person does not have a Trust and passes away, their assets (known as the probate Estate) must pass through the court-supervised probate administration process. If the person has a Last Will and Testament, the desires of the person in the Will determine who becomes the Executor (also known as the Personal Representative) to handle the management of the Estate and who should inherit the assets of the Estate. If there is no Will, the laws of the state where the person died determine who has priority to serve as Personal Representative (also known as the Administrator when there is no Will) and who will inherit the probate Estate.​

 

In order to open probate, a petition must be filed with the Court (or a qualification made with the Clerk of Court in Virginia). The Will, if any, must also be filed with the Court. If there is no Will, or if the Will does not waive bond, a surety bond must be filed with the Court as well. A surety bond is essentially a promise to repay any funds that are mishandled, backed up by a surety company (which is a type of insurance). The surety will require payment of an annual premium, which is paid from the assets of the Estate. ​

 

Once appointed, the Personal Representative has certain duties and obligations. The Personal Representative must act in accordance with the law and to deal fairly with the Beneficiaries (i.e. the people entitled to inherit the assets) of the Estate. As Personal Representative,  will be required to perform a number of services including collecting and safekeeping assets; preparing the inventory of Estate Assets; paying debts and expenses of the deceased; financial planning for the Estate with respect to taxes, distribution, and investments; preparing and filing federal and state estate and personal income tax returns, if required; distributing the residue of the estate; and preparing periodic accounts including final accounting of the Estate. These duties can be cumbersome and complicated, and legal advice and supervision of an experienced probate attorney can be essential.​

Trust Administration

When a person has set up a Trust through a Trust Agreement, usually the probate administration process is not required. The Trustee of the Trust (i.e. the person appointed to handle trust assets), must administer the assets of the Trust in accordance with rules of the Trust Agreement and state law. 

 

The duties of the Trustee include sending notices to the individuals that will receive assets from the Trust (called Beneficiaries); collecting and safekeeping assets; preparing accountings as requested by the beneficiaries or as required by law; paying debts and expenses; financial planning for the Trusts with respect to taxes, distribution and investments; preparing and filing federal and state tax returns, if required; distributing assets to the beneficiaries; and terminating the Trust in accordance with law. Trust rules are usually more complicated than those in a basic Will.​

 

Because Trust Agreements and compliance with the law can be complicated, legal advice and supervision of an experience trust administration attorney can be required.

Get in touch so we can start working together. You can contact Kyle by calling (703) 436-9638 or emailing contact@eptinglaw.com