October 2024
Lawyer for Life. Keeping your family healthy, wealthy and wise.
 

 

When it comes to estate planning, the role of a Trustee is one of the most crucial components in ensuring that your wishes are honored after your passing. A Trustee is a person (or entity) appointed to manage and distribute your assets according to the terms of your Trust.

Understanding the duties of a Trustee can provide peace of mind for both you and your beneficiaries and allows you to make educated decisions when naming someone to such an important role in your estate plan.

The main duty of a Trustee is their fiduciary responsibility. This means they must act in the best interest of the beneficiaries of the Trust. All actions that are taken must be justifiable, and openly communicated to the beneficiaries.
Three images - Elderly woman with smile on her face staring out kitchen window, Two farmers, father and son, looking at tablet on bovine ranch, and Trustee word on jigsaw puzzle.

Within the same realm, the Trustees are also responsible for managing trust assets wisely. This means they must ensure assets are protected and regularly reviewed. Naming a Trustee who is at least somewhat financially savvy is important.

Trustees should keep accurate records of all transactions, communications and decisions made on behalf of the Trust. It will keep beneficiaries informed, and create a paper trail if there are any disputes later. This also helps at tax time, when the Trustee must also navigate the world of tax returns, and tax information related to the Trust. Again, it is worth consulting with and probably hiring an estate planning attorney to help with the trust administration.

Finally, the Trustee also makes distributions to beneficiaries, according to the terms of the Trust. Sometimes there are set amounts to be distributed, but sometimes it requires the Trustee’s discretion, which may involve difficult decisions.

Choosing the right trustee is one of the most important decisions in your estate planning process. While family members or friends may offer a personal touch, professional trustees, such as banks or trust companies, can bring expertise and impartiality to the role. However, they often come with a greater cost than an individual Trustee. Consider the Trustee’s experience, availability, and ability to navigate the complexities of trust management when making your choice.

It is important to get consent of the individual or institution that you name as Trustee. If they do not consent upon your death, it may be difficult for the heirs and beneficiaries to find an alternate Trustee who will accept. Understanding the duties of a trustee is essential for effective estate planning. By selecting a trustworthy and capable individual or institution, you can help ensure that your assets are managed responsibly and distributed according to your wishes.
 

Probate is a legal process that occurs after someone passes away, designed to ensure that their assets are distributed according to their wishes and applicable laws. Probate is not a necessary step in every estate administration, but many people do not realize it can be avoided. Understanding the probate process can help alleviate concerns and streamline the experience for heirs.
The inscription probate on a black board next to a notepad, pen and key in a red gift box.

Probate involves validating the deceased's Last Will and Testament (“Will”) in front of a court, if one exists. The Will appoints an executor or personal representative, and oversees the distribution of assets. The process generally includes:

  • Filing the Will: If there is a Will, it must be filed with the probate court in the county where the deceased lived. The court will confirm its validity.
  • Appointing an Executor: If the deceased named an Executor in the Will, the court will formally appoint them. If there is no Will, the court will appoint an administrator, typically a close relative.
  • Inventory of Assets: The Executor is responsible (usually with help from an attorney) for identifying and cataloging all assets owned by the deceased, including real estate, bank accounts, investments, and personal belongings.
  • Paying Debts and Taxes: The Executor must settle any outstanding debts and pay applicable taxes from the estate before distributing assets to beneficiaries.
  • Distribution of Assets: Once debts and taxes are settled, the Executor distributes the remaining assets to the beneficiaries as per the instructions in the will or according to state laws if there is no will.
The duration of the probate process varies widely based on several factors, including the complexity of the estate, the number of assets, and the jurisdiction. On average, probate can take anywhere from a few months to over a year. Complications such as disputes among heirs, challenges to the Will, or the need for asset appraisals can further extend this timeline.

As mentioned above, probate can be avoided through a couple of different estate planning strategies. It is important to consult with an attorney to review pros and cons of any of these techniques.

One way to avoid probate is to establish a trust – whether revocable or irrevocable. Assets placed in a trust bypass the probate process allowing a more seamless transfer to beneficiaries. Another route for avoiding probate is joint ownership on an asset. Again, this must be done only after careful consideration and consultation with an attorney as there may be other unintended consequences of joint ownership. Beneficiary designations and outright gifting of assets are other ways of avoiding probate, but may not actually accomplish your overall estate planning goals.

While it can seem daunting, knowing what to expect during the probate process, and taking proactive steps can help minimize its impact on your heirs.
 
Christine C. Weiner