Estate and Trust Administration - Generally

Proper trust or estate administration involves collecting assets, ensuring necessary income and estate taxes are filed, and often providing accountings to estate and/or trust beneficiaries. When a person passes away with a living trust, then a significant probate proceeding is typically not necessary. In that event, a trust administration is proper. However, if a person passes away with probate assets, probate is required.

What are Probate Assets?

Probate assets are assets titled in the name of the decedent, which had no beneficiary designation and no joint ownership. So, a house owned jointly by a husband and wife will not be a probate asset at the first death, but would be a probate asset at the second death. An investment account with a beneficiary designation is not a probate asset, while one without such a designation is a probate asset.

What is Probate?

Probate is a court-supervised method of administering an estate after someone has passed away, whereby the state reviews the probate assets that an individual owned at the time of death. This process requires the Executor or Personal Representative of the estate to gather detailed information on the value of those assets as of the date of death, and requires him or her to account for all receipts and disbursements from estate assets that have occurred since the date of death. The procedure for paying the decedent’s bills, dealing with claims against the estate, and distributing the remaining assets are also governed by the probate process.

What is Modified Probate?

Available in Maryland, Modified Administration (and/or Modified Probate) is an abbreviated probate proceeding that eliminates the need for an Inventory or Accountings, substituting instead a Final Report that deals with the same basic information. Modified Probate is only available for estates where the heirs and the Personal Representative(s) include only a spouse, sibling(s) and/or children. In addition, Modified Administration can only occur if everyone consents.

What is Unsupervised Probate?

Available in the District of Columbia, Unsupervised Administration of Probate is a full probate proceeding that eliminates the review of the inventory and accounting process by the Court, allowing the Personal Representative to serve the heirs and other interested persons with those filings, but allowing an heir or an interested person to Petition the Court for review of those issues.

What is Trust Administration?

If a person uses a revocable living trust as their primary testamentary planning document, that trust may have to be administered by someone else in the event that the grantor becomes incapacitated (in which case the successor trustee must step in and manage the trust for the grantor’s benefit). Alternatively, the living trust will need to be administered at the grantor’s death. Either way, a successor trustee is able to access funds quickly so that he or she can take over management of the incapacitated or deceased grantor’s assets without first getting approval from the court. In administering a trust, however, there may be some notice requirements and will always be certain procedures that must be followed to properly discharge the duties and obligations required by the trust. So, although the court may not be involved in the process, it is essential to consult with a knowledgeable attorney, and sometimes to have him or her assist you in administering a loved ones’ trust.