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Scott Barbur, Barbur Laskey

Estate Administration: The Other Side

| Scott Barbur, Barbur Laskey

We commonly talk about Estate Planning, which includes well-known documents such as Wills and Trusts. However, preparing an Estate Plan is only half of the process. Once the preparer dies there is a need for the other half: Estate Administration. This is a foreign term to most people, which is not necessarily a bad thing. Essentially, Estate Administration is the process of transferring the assets (“estate”) of a deceased person to the persons entitled to receive them.

Most people (Barbur Law attorneys notwithstanding) would not (and probably should not) want to administer too many estates in their lifetimes. We at Barbur Law, however, thrive on helping people navigate Estate Administration. While knowing the nitty-gritty details is best left to us as professionals, it is good for everybody to have a passing knowledge of what Estate Administration is. As such, below are some descriptions of the most common forms of Estate Administration. Having basic familiarity of these terms and concepts is not just comforting when the time comes when you may have to administer an estate of a loved one but can also be very helpful when crafting your own Estate Plan.

Probate. Probate is the court process through which a person’s assets are transferred from a deceased person to the heirs or beneficiaries of that person. Along the way, the assets are subject to claims from creditors of the deceased person so as to make sure that all final debts are paid. While this process is often brought up in a negative manner, it is generally not too horrible to manage, but it does take some time (usually about 6 to 9 months). There are two type of probate estates: testate and intestate:

Testate Estate. “Testate” refers to an estate in which the deceased person prepared a Will. While making a Will does not keep property out of probate, it does allow a person to dictate where they would like for their assets to be distributed. Having a Will also makes probate a smoother, easier process so it is well worth it to have one in place!
Intestate Estate. “Intestate” refers to an estate in which the deceased person died without a Will or other means of directing where their assets should go. In this event, the deceased person’s assets would be subject to intestacy statutes of the state in which their assets are being probated. This lack of control, together with additional costs, run-around and uncertainty in the probate process, make this the “worst case scenario” for an estate.

Trust Administration. Assets that are effectively included in a Living Trust avoid probate. While probate is generally not “horrible” – as stated above – it does have its drawbacks. Probate is a public process through the court system and the process requires jumping through a lot of hoops. Trust administration, however, can generally be completed privately and more efficiently among the trustee and beneficiaries, resulting in time- and cost-savings in many scenarios.

Transfer-on-Death Beneficiaries. Some assets, especially retirement and investment accounts, allow for the naming of transfer-on-death beneficiaries. When these types of designations are available, they can be a very useful tool in estate administration as they allow for almost immediate transfer to the named beneficiaries, also avoiding probate. While these may not require a lot of process, there may be tax or other legal issues involved so it may be beneficial to seek professional assistance.

We highly recommended that you work with an experienced Estate Administration attorney after the death of a loved one when handling Probate or Trust Administration. These are unique and complex processes that include heavy legal issues such as ownership and taxation. Working with a professional who knows the processes and cares, such as us here at Barbur Law, is essential when it comes to Estate Administration.