The loss of a loved one can be one of the most difficult experiences in life. It is our sincere desire to help our clients through this difficult time, helping to make things as painless as possible.
We take pride in our ability to navigate the bureaucratic estate administration system, leaving our clients free to deal with life’s more important issues.
The Need for Trust Administration
The loss of a loved one can be one of the most difficult experiences in life.
Unfortunately, the Internal Revenue Service and the State of California tend to pour salt on our wounds by making us responsible for a myriad of details while administering a loved one’s estate.
It is easy to become overwhelmed with the complex details of estate administration: paying estate taxes, notifying creditors, gathering and distributing assets according to preset formulas, keeping close accounting records of the most minute transactions— it’s almost enough to drive a person “round the bend”.
At Ainer & Fraker, LLP, it is our sincere desire to help our clients through this difficult time, helping to make things as painless as possible.
We take pride in our ability to navigate the bureaucratic estate administration system, leaving our clients free to deal with life’s more important issues.
The Role of Legal Counsel
In each area of Estate Administration, it is critical to have the advice of competent legal counsel.
The myriad rules, statutes, regulations, taxes, expenses and procedures of estate administration can easily overwhelm the survivors in an estate.
The consequences for overlooking deadlines or other material oversights can be draconian.
We are ready to assist you and your family in meeting your Estate Administration needs.
Benefits of Trust Administration
Trust Administration enjoys many advantages over the cumbersome, bureaucratic Probate process.
This section will address only the advantages of Trust Administration as a process, not the benefits of a Living Trust. These additional benefits of a Living Trust are far more numerous, and are discussed in greater detail here.
(1) Reduced Cost– The average fee for Trust Administration is in the range 1-2% of Trust Assets, often a savings of thousands of dollars over the probate fee
(2) Time – Since Trust Administration generally isn’t subject to the Probate Court’s calendar, the entire process can be handled much more expeditiously. Simple trust administrations can often be completed in 6-9 months, versus the 9-18 months typically seen in probates.
(3) Privacy – Whereas Probate is a public procedure, Trust Administration is a private procedure. Documents which are not filed in Probate Court remain private documents, and are not subject to general public scrutiny. Under California Law, the only people entitled to see a copy of your Trust a people named in it, and your heirs at law.
(4) Greater Control & Flexibility over Distributions – Unlike Probate, where a Judge must approve early distributions, the Trust Administration process allows for immediate payment of debts and expenses, funeral costs, and can get money in the hands of the beneficiaries immediately.
Work to be Done during Trust Administration
One of the most common mistakes that a family can make is when a family member or loved one passes away, leaving a Living Trust behind, and the survivors think that no work needs to be done because Probate has been avoided.
While a properly funded Living Trust may allow a Decedent’s estate to avoid a formal Probate proceeding, it does NOT allow the survivors to ignore the Estate Administration process altogether.
While court supervision may often be avoided, certain key steps must still be taken, including:
(1) Notification of all Creditors (or Potential Creditors) who are Known or Unknown
(2) Notification of all Beneficiaries named in the Trust Instrument
(3) Payment of all Taxes, Debts and Expenses of the Estate
(4) Distribution of all Estate Assets according to the provisions of the Trust Instrument
(5) In the case of an A-B Trust: Division of the Living Trust into Survivor’s and Credit Shelter trusts.
Ignoring these steps may have negative legal and tax consequences on the estate of the decedent
While these steps appear similar to the procedures that you would encounter in a formal Probate proceeding, the key distinction is that the Trust Administration process is relatively informal, and can often be handled by an Estate Planning Attorney in much less time – and at a fraction of the cost – of a formal probate proceeding.
Conclusion
While the Trust Administration process is substantially cheaper and less bureaucratic than the Probate process, it doesn’t relieve family members of their obligation to ensure that their loved one’s Trust has been properly administered.
Seeking legal representation is one of the most effective ways to ensure that all of the obligations of the law have been satisfied, and that the entire process is handled in an efficient a manner as possible.
At Ainer & Fraker, LLP, we stand ready to assist you in meeting your Estate Administration needs.