Estate Administration
Estate Administration in NJ, NY, FL and TX
If you own anything in NJ, NY, FL and TX, you have an estate. Having an estate means what you own, whether it’s a vehicle or a bank account, when you die, it goes to your estate. If you have loved ones or even a beloved charity, you may want to make sure what you have goes to the appropriate person or organization. Estate planning is key to this successful end because through it, your estate can be administered properly and according to your wishes and the law.
At Law Offices of Sarah Briguglio, our estate planning attorney will explain what estate administration is and how it can impact your estate if done right versus if done wrong. Contact us today at (813) 565-7775 to schedule a Consultation and learn more about the importance and benefits of estate planning.
What is Estate Administration?
Estate administration refers to the legal process around the organization of someone’s affairs after they pass away. It includes identifying their financial accounts, real estate, and other tangible property. It also involves settling debts, filing tax returns, notifying Social Security, and distributing their remaining assets.
A personal representative handles the administration of someone’s estate. Where someone has a will, they nominate an executor as their personal representative. If someone dies without a will (intestate), a probate court appoints an administrator as their personal representative.
The Estate Administration Process in State
Specific estate administration processes vary between states. They also depend on whether an executor or administrator is involved. However, the following steps are generally practiced across most jurisdictions.
Arrange the Funeral
Not always, but often the estate administrator will request burial or cremation, organize a memorial, order death certificates, and make other arrangements accordingly.
Appoint a Personal Representative
If someone dies with a will, their will must be filed with the probate court where the deceased lived. If there is no will, their eligible heirs (usually their spouse, adult children, or parents) must apply to the court to become an administrator.
Notify the Relevant Parties
The personal representative must notify any involved parties of the time frames to make a claim against the estate. Who exactly must be notified depends on relevant state laws.
Identify the Assets
The personal representative must prepare an inventory of all the deceased’s assets to file with the probate court.
Settle Outstanding Liabilities
The personal representative must pay the deceased’s outstanding debts or bills. These can include but are not limited to:
- Personal loans
- Car or other vehicle loans
- Condominium or homeowners association fees
- Income taxes
- Phone bills
- Utility bills
- Credit card debt
The above are known as the decedent’s last bills.
File Any Necessary Tax Returns
At the federal level, estates over a certain amount are taxed. There may also be estate taxes imposed at the state level. The personal representative also needs to file the deceased’s last income tax return.
Failure to file federal and state (if applicable) tax returns can result in fines and interest.
Distribute the Estate
The personal representative typically needs to wait until after the claims period has passed before they can distribute the deceased’s estate. This is done according to the deceased’s will if there is one and any relevant laws. The personal representative also usually reserves a portion of the estate for any other possible claims and costs associated with finalizing the estate.
Finalize the Estate
Finalizing the estate can mean many things, but typically it involves filing a final account with the probate court, detailing all the actions the personal representative took concerning the estate. Once the account is approved by the court, the personal representative can distribute any remaining funds and finalize their involvement.
There can be strict timeframes around the estate administration process. You should speak to an estate administration attorney in State for guidance on the relevant laws and deadlines.
How to Choose an Executor in State for Your Estate
When appointing an executor in your will, there are quite a few factors you may want to consider. Keeping in mind that these factors are relevant to your specific circumstances, here are some points to keep in mind.
- Choose an executor who is responsible, trustworthy, and competent. While an executor doesn’t need to have specialist qualifications, they do need to be able to handle your affairs ethically and follow your wishes. They also need to be able to manage the responsibilities involved in being an executor.
- Confirm your chosen executor is eligible. While eligibility rules vary between states, executors generally must be aged at least 18 years old. People with criminal histories may be precluded from being executors. Some states may also require the executor to live in the same state where the estate administration process takes place.
- Appoint a contingent executor in case your nominated executor is unable to perform their duties. Common reasons they may not be able to perform is their own death or incapacitation by an illness or another condition. For these reasons, you may want to appoint an alternative executor to the estate.
Choosing the right executor can be challenging. An estate administration lawyer can answer any questions you have about appointing an executor.
Common Issues in Estate Administration in State
Many issues can arise in the context of estate administration, and many of the latter can create problems or challenges. It is in part why you want a lawyer to help you create a solid estate plan that can anticipate, address, and resolve any issue. With that said, here are some common estate administration issues in State with which you should acquaint yourself.
- The personal representative fails to fulfill their duties. This can happen if they do not act in accordance with the deceased’s wishes, fail to perform their responsibilities, or misuse the estate’s assets. This failure may amount to a breach of their fiduciary duties and result in the personal representative being removed from their role. It is also why you may want to list an alternative.
- Disputes or challenges to a will. It is not uncommon for disputes to arise between family members during the estate administration process. For example, there can be claims that a newer version of the will exists or that undue influence or fraud occurred.
- An outdated or incomplete will. If your will is missing information or contains outdated information, the executor may not know what to do with aspects of your estate. People whom you do not wish to obtain certain property or assets may be in line to receive it but for specific details in the will. You can avoid this problem by reviewing and updating your will during your lifetime, as necessary.
Acting as a personal representative can be complex. That’s why it is important to speak to an estate planning attorney who can help you fully understand your obligations and the laws in your state.
Contact an Estate Planning Lawyer Today
Estate planning is important in if you want to be certain your bills are properly covered after you die and your heirs and beneficiaries benefit from your life’s work. The right estate administrator can make all the difference and help ease the grief and stress loved ones experience.
Contact us today either by calling us at (813) 565-7775 to schedule a Consultation. We will discuss all your concerns, review your estate, and move forward with a plan best for you and your family.
Administration of Trusts in State
Appropriate trust administration is important when your assets are entwined in a trust and your beneficiaries are dependent on it. Choosing the type of trust and appointing a trustee will be critical. Mistakes can lead to challenges, and that means your intended beneficiaries, like children, may not get what you want them to have while others, like creditors, may get what you don’t want them to have. As the rules can vary across state lines, it is important to engage an attorney with experience in multiple states.
At Law Offices of Sarah Briguglio, our estate planning lawyer in NJ, NY, FL and TX, will listen carefully to each client’s unique needs and will be sensitive to the emotions estate administration triggers. We will construct and administer trusts to safeguard your assets and benefit your loved ones. We represent individuals and families, fiduciaries, and businesses in all types of estate matters. We cover many areas of estate planning, including administration, trusts, wills, and the asset transfers that come with them. Contact us at (813) 565-7775 to schedule a Consultation.
What Is Trust Administration?
When trusts are created, the terms for their administration are contained within them. The person who creates the trust is known as the trustor, and the person whom the trustor appoints to administer the trust is called the trustee. The trustee administers the trust by following the terms of the trust and acting in the best interest of the beneficiary (or beneficiaries).
Often, trust administration begins when the trustor passes away, but this is dependent on the trust and its terms and conditions.
How Is a Trust Administered in State?
There are certain steps and procedures that should be followed in order to properly administer a trust. While they may differ by jurisdiction and pursuant to the terms of each trust, some of the more common elements of the process are described below.
Know Your Trust
A trustee needs to be aware of everything there is to know about the trust they are tasked with administering. Reading the terms of the trust is a good place to start. The trustee will also need to gather all documentation they can obtain that will help them to know exactly what they are managing. This can include:
- Bank statements
- Rental agreements
- Life insurance policy
- Certified copies of the trustor’s death certificate
There may be other documents the trustee needs to understand the trust. The trust itself should clarify what these are.
Secure Trust Assets
After ascertaining what the trust assets are, the trustee will need to secure them. This may entail ensuring the assets are properly titled, as well as taking an inventory of the assets. The trustee will also need to determine what the assets are worth.
Trust assets come in a variety of forms, including life insurance proceeds, real property, investment accounts, and personal property (such as jewelry).
Trustees are often required to open a bank account in the name of the trust. This bank account can hold assets while the trust is administered. It will also provide a way for the trustee to show that they properly handled the assets of the trust.
Notify Beneficiaries
Part of the trust administration process is notifying any of the beneficiaries who are named in the trust. Beneficiaries need to know who the trustee is and the terms of the trust. Jurisdictions vary, and it may be that there is a timeline that must be adhered to for notifying beneficiaries. An estate planning lawyer in your area can advise you on this and other state-specific issues.
Notify Creditors and Pay Debts
The trustee should try to determine to whom the trust may be indebted, and notify them of the trust and that they are the trustee. The trustee should obtain copies of any and all claims against the trust and investigate them to ensure they are a valid debt that needs to be paid. Then, they should take the proper steps to pay the debts, including any funeral or cremation expenses.
Distribute Trust Assets
At this point, it is time for the trustee to distribute the assets of the trust. Generally speaking, before that happens, the beneficiaries must be provided with an accounting of the trust. If they agree with how the trust was administered, they will need to sign off on the accounting. Then, the terms of the actual trust will dictate how the trustee administers the assets. There may be some room for discretion given to the trustee, or the trustee may not have any discretion. It all depends on the way the trustor set up the trust.
Choosing a Trustee to Administer the Trust
Because the trustee has quite a lot of power, it is important to choose a trustee whom you can trust. That said, a trustee cannot refuse to carry out the terms of the trust and cannot act in bad faith. Consider these factors when choosing a trustee:
- Time. It will require a lot of the trustee’s time to administer the trust. A trustee is tasked with many different responsibilities specific to the trust, like filing income and estate tax returns, selling real estate, maintaining property and records, and finding and notifying creditors and beneficiaries, among other things.
- Skills. Is the trustee equipped with the right skills or expertise? Mistakes and mismanagement can happen when the trustee does not quite or fully understand what to do and how to carry out their responsibilities.
- Cost. Some trustees, like corporate trustees, charge fees. You need to know what those fees are and how they will impact the trust. But also, a family member appointed as trustee may not charge a fee but may have to hire an attorney, and that will cost them. These and more are things to consider. The burden could be a lot.
Many times people choose close friends or family members as trustees, but you may want to consider someone with the time and expertise even if that will cost more than a family member. In the end, it may save you and your loved ones time and money.
Common Problems with Trust Administration
Unfortunately, problems frequently occur in trust administration. Some of the more common issues are described below. The fundamental issue creating these problems, however, is typically poor drafting of the trust.
Beneficiary Death or Incapacity
Beneficiaries may have passed away or become incapacitated since the trust was created. The trustee needs to ensure all beneficiaries are still living and able to receive their distribution. If not, the trustee will likely need advice from the court on how to proceed. But also, it is a good idea to put into place contingent beneficiaries so that if a beneficiary dies, there is another beneficiary in place to benefit from the trust.
Irrelevant Provisions
When trusts are not reviewed and their terms are not kept current, it is possible that some of the language used will become irrelevant. When this happens, the trustee will typically seek court direction on the best way to proceed.
Beneficiary Disagreement
Beneficiaries may not agree with some of the decisions made by the trustee. This is especially true when the trustee has discretion over the distribution of assets and a beneficiary disagrees with how the trustee uses that discretion. Another example is when a beneficiary does not agree with the actual terms of the trust and contests it. Litigation could ensue.
With all these problems, delays occur. Delays are costly. It is best to avoid these problems by making sure your trust is drafted properly and in compliance with the law.
Contact an Estate Planning Attorney Today
At Law Offices of Sarah Briguglio, our estate planning lawyer based in handles all types of estate plans and helps clients understand what will work best for them, benefit them, and benefit their loved ones. We make sure the documents that make up your estate plan are solid, well-supported, and in compliance. Contact us today by calling us at (813) 565-7775 to schedule a Consultation.