Probate is a court supervised procedure to oversee the transfer of the deceased persons assets to the beneficiaries named in a Will or, if there is no Will, to see they are distributed to those persons entitled to the estate as required by law. If the estate value is less than $150,000 and meets the statutory requirements, no formal probate is required and an affidavit procedure can be utilized by the person(s) entitled to the decedent’s property.
Probating an estate first begins with the filing of a petition to be appointed the personal representative of the estate. Publication in a local paper of general circulation that you have petitioned for appointment is also required. If appointed at the hearing on your petition, you will then be required to administer the estate to a close.
The personal representative (an executor, if named in the Will) then takes charge of the decedent’s assets by marshaling them into the estate. That includes real property, bank accounts, and any other asset that doesn’t pass to someone outside the probate administration. An inventory of the assets you marshaled will need to be filed with the court. Creditors will also need to be dealt with during administration by paying them out of the assets that you have marshaled. Once the estate has been open for at least four months and the creditors and debts of the estate have been paid, then you can petition the court for distribution.
So long as there have been no objections, problems marshaling the assets or liquidating assets for distribution, the estate can be brought to a close in about 6-7 months from the hearing date of your appointment.
Taking over the administration of a trust generally arises in the context of incapacity or death of the settlor(s). Upon the incapacity of the settlor(s), the successor trustee will assume the management of the trust estate under the original terms of the revocable trust; handling all affairs of the settlor(s), including paying taxes for them. Upon the death of the settlor (or the surviving settlor of a couple’s trust), the successor trustee will need to undertake several initial duties to ensure that the trust administration can begin now that it has become irrevocable due to the death of the settlor(s).
In either circumstance you assume the office of trustee (due to death or incapacity), you will need to marshal the trust assets of the settlor(s). If you assume the office as result of the death of the settlor(s), you will need to apply for a tax identification for the trust now that it is irrevocable and then notify all beneficiaries and creditors that the trust is irrevocable. That notification requires several technical requirements but will generally include the terms of the trust and identify the trustee. It will also serve the purpose of notifying those persons and entities that they have 120 days to challenge the trust.
These initial activities will usually include filing affidavits of death for real property that belonged to the trust as well as marshaling personal property that has title (bank accounts, cars, etc.). For personal property with title, the trustee can execute a certificate of trust to serve on those persons/entities handling trust assets so that they will now be authorized to deal with the new trustee.
After managing the trust estate by meeting all the debts and expenses of the trust (and settlors, if applicable), and the 120 notice period expires, the trustee can then start planning for the distributive provisions of the trust which usually means liquidating the estate and providing an account of activities to the beneficiaries. The final steps of administration will also include withholding sufficient funds from the distribution to deal with the final administration and tax obligations of the trust.
These are just the outline of general procedures for administration in trust matters. The complexity varies from case to case, so it is always advisable to consult with an attorney and tax advisor prior to proceeding to manage and distribute a trust estate.