The legal terms involved in handling the property of deceased persons through wills and trusts are often confusing for lay people. If you are looking for reputable living trust planning, it is essential to understand what terms like administration in probate mean. This article will guide you through the salient element of wills and trusts to empower you to select the most suitable choice for your estate planning.
Defining Administration And Probate
The probate process usually includes proving that the deceased’s will is valid, inventorying the property the deceased person left behind, appraising the property, repayment of debts and taxes, and the distribution of the rest of the property amongst the beneficiaries following the will or state law (where there is no will). The probate process involves filing legal paperwork in court and litigation between the beneficiaries, administrator and creditors of the estate. All court and legal fees are obtained from the estate property that would otherwise have gone to the estate’s beneficiaries.
Administration of estates in probates is a general term that refers to all the actions that must be taken to guide all the property that a deceased person has left behind through the probate process, after which it can be distributed to the beneficiaries. Though the administration is part of the probate process, it cannot begin in earnest until the probate process is complete. The probate process is dictated by state law and is governed by the courts, while the administration process is governed by the terms of the will or trust and is governed by the estate administrator.
What is an Administrator of an Estate?
Your estate’s administrator will be the individual so named in your estate plan, will or trust. If you fail to appoint an administrator or construct a will/estate plan, the court will nominate one on behalf of your estate. It is not advisable to leave the appointment of an administrator to the court because the person appointed will be in charge of compiling your assets and handling all the facets of the probate and administration process mentioned above. Your estate and beneficiaries will be much better off when you take the time to appoint an administrator you trust to carry out your wishes as spelled out in the will or estate plan. People usually appoint their attorneys or closest living relatives as their administrators.
Usually, administrators are compensated for their time, expertise and efforts using funds drawn from the estate. Where the deceased has not explicitly stated the administrator’s remuneration, the court usually determines an appropriate percentage of the estate to compensate them.
The Difference Between Executor and Administrator of Estate
Executors and administrators have the same role in the probate process. The significant difference between the two is how their roles are established. Administrators of estates are usually appointed where the deceased did not leave a will or where the will does not appoint a specific person. On the other hand, the estate’s executors are directly named in the deceased’s will, like the party to administer the estate. The court usually appoints an administrator on the estate’s behalf when a named executor is deceased.
Even though there is a distinct difference in the powers and source of authority, both executors and administrators are answerable to probate court. Executors have more power when handling the estate’s assets because their authority and actions are derived from and directed by the deceased’s will, which may grant them powers and responsibility not conferred by state laws. Administrators can only exercise the powers and responsibilities granted by state law when dealing with estate property.
What are the Duties of an Estate Administrator?
The roles of estate administrator’s usually vary depending on the presence/absence of an estate plan and the estate size. Administrators are usually expected to gather all the deceased’s assets, belongings and financial accounts, list down all outstanding bills and debts, file an inventory of assets and debts with the court, issue notices to creditors and debtors, file for life insurance policies owing to the estate, settle all debts and collect monies owed to the estate, file federal and state tax returns and communicate with all heirs and beneficiaries to the estate.
Do You Need a Lawyer to Administer an Estate?
Ideally, you do not need a lawyer to administer an estate. However, due to the complex nature of probate and succession law, it is advisable to hire an experienced attorney to fast-track the process and offer crucial advice on saving on estate taxes. If you can avoid placing the administration burden on a loved one, it is best to hire a trustworthy attorney instead. Choosing a lawyer as your administrator or executor will help make the probate process quick and effective by reducing conflict among the beneficiaries.