A lot of people try to reduce estate planning to a single action without considering estate administration. You record your final decisions regarding the way you want your assets to be transferred after your passing. When the time comes, everything falls into place, and your wishes will come to fruition.
In reality, there are hands-on tasks that must be completed during the estate administration phase. Plus, there are laws that must be followed while the estate is being administered. You should definitely consider this detail when you are making your decisions.
Simple Wills and Probate
If you use a will to serve as the centerpiece of your estate plan, you name an executor as the administrator. This can be someone you know personally, or you can use a professional fiduciary. The executor will be required to admit the will to probate after you are gone.
This is a legal process that takes place under the supervision of a court. During probate, final debts are paid, and creditors are given time to come forward seeking payment. The assets will be identified, inventoried, and prepared for eventual distribution.
Estate challenges can be presented while the estate is being probated by the court. In all, this process will take about nine months to run its course if everything goes very smoothly. More complicated cases can take longer periods of time.
Living Trust Administration
The most commonly used alternative to a simple will as an asset transfer vehicle is the revocable living trust. As the name would indicate, the trust can be revoked by the grantor (the person who creates the trust) at any time. The grantor will serve as the trustee while they are alive and well.
There is no loss of control of the assets in any way. When the trust is being established, the grantor will name a successor trustee to administer the trust after their passing.
The administration process is not subject to probate when a living trust is used. As a result, it is simplified and streamlined. There are other benefits that go along with the utilization of a living trust that we will cover in a future post.
Irrevocable Trusts
In addition to the revocable living trust, there are also irrevocable trusts that satisfy certain targeted objectives. People use these trusts to gain estate tax efficiency, they can be used for asset protection, and a supplemental needs trust can preserve benefits for people with special needs.
The trustee will have specific duties related to the objectives that are being addressed through the utilization of the device.
Choosing a Trustee or Executor
There are a few things to keep in the forefront of your mind when you are designating a trustee or executor.
First, this is not a ceremonial role that you bestow upon someone because you love and respect them. There are serious financial and administrative tasks that must be completed, so you have to take this into consideration.
Secondly, if you don’t know anyone who is a suitable candidate, you can engage a trust company or the trust department of a bank to handle the administrative duties.
When you use a professional, there are no conflicts of interest, there will be no longevity concerns, and the assets will be managed by a qualified representative.
Check Out Our Videos!
If you are interested in learning more about this important responsibility, check out our videos. They cover several key topics, and the information is delivered in a down-to-earth and easily understandable manner.
To gain access to all of these videos free of charge, click this link: Phoenix, AZ estate planning videos.
Schedule Consultation Today!
We are ready to act if you would like to work with a Phoenix, Flagstaff, or Tucson, AZ estate planning lawyer to create a plan or adjust your existing plan. You can send us a message to request a consultation appointment, and we can be reached by phone at 888-222-1328.
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