How will your estate be administered?

How will your estate be administered?

There are three main types of “estate” administration depending on the estate plan a deceased person had in place.  

The first type is called testate probate administration.  This simply means the deceased person had a last will and testament in place at the time of their death in which they designated who should administer their estate and who should inherit their assets.  Testate probate administration involves filing paperwork to open a formal estate with the probate court and filing specific required reports throughout the administration of the deceased person’s estate to report all activity (i.e. date of death values, expenses paid, income earned and distributions made).  Anything filed in probate court is public record. The probate court must approve all reports before the net estate assets can be distributed to the designated beneficiaries in the deceased person’s will.  This can be a cumbersome process depending on the type of assets a deceased person owned. 

The second type is called intestate probate administration.  This means the deceased person did not have any estate planning documents in place at the time of their death, so the laws of the state where the deceased person lived would control who administers their estate and how their assets are distributed.  The process to open the estate with the probate court and additional reporting requirements are the same as for a testate probate administration and the estate would also be public record.  The difference is that the law controls who is allowed to serve in the role to wrap up the deceased person’s affairs and who should inherit their assets. 

The third type is called trust administration.  This means the deceased person had a revocable trust in place at the time of their death in which they designated who should handle their affairs and who should inherit their assets.  A revocable trust allows a deceased person’s estate to be administered privately outside of the probate court.  There are still administrative tasks that need to be handled in order to wrap up a deceased person’s affairs (i.e. reporting to the tax authorities); however, the administrative process is less complicated because there is minimal to no court involvement.

Contact us for a free consultation to ensure your estate will be handled the way you want.