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Estate & Trust Administration After a Loved One’s Death

By: Serena Tanner • Edited by: Katelynne Shepard • Subject Matter Expert Reviewed by: Sarah-Jane Williams, LL.B(Hons) • 6 cited sources • Updated Oct 14, 2024

Often when you lose a loved one, it’s hard to think about anything but the grief you’re experiencing. But, unfortunately, there are a lot of tasks that have to be handled, such as ensuring that the deceased’s last wishes are honored and that their assets are managed and distributed how they wanted. This happens during estate and trust administration. 

Key Takeaways

• Estate administration involves a named executor or administrator distributing assets to beneficiaries.
• Trust administration involves a trustee managing the trust according to the trust document.
• Executors and trustees must follow laws and regulations while acting in the beneficiaries’ best interest.

What Is Estate Administration?

Estate administration is the process of handling and finalizing the financial affairs of a person who has died. First, the deceased’s assets must be collected and valued. Then, their debts need to be paid from the estate. Finally, their remaining assets have to be distributed among heirs as stipulated^[1].

Understanding the Estate Administration Process

The estate administration process takes time. The executor of the estate is key to ensuring it all moves smoothly.

Role of the Executor

Your loved one’s executor is the personal representative who manages the estate. Typically, this person is named in a will, and it can be a close loved one, a lawyer, an accountant, or even an entity like an institution. In some cases, such as if your loved one never wrote a will, a will is invalid, no executor is named, or if the named executor can’t be found or is unable to act, the probate court will appoint an administrator to act in this role. The executor must act in the best interest of the estate and its beneficiaries^[2]. Their role may include duties such as:

• Locating and securing the deceased’s assets
• Notifying beneficiaries and creditors of the deceased’s death
• Filing paperwork to initiate probate with the court

The Probate Process

Probate is the process of validating and administering the deceased’s will. It’s a legal process that ensures the deceased’s assets and estate are handled according to their wishes, or in the absence of a will, following state law.

When someone dies with a will, the executor must file the will with the probate court. Many states require this to happen within a certain timeframe, such as 30 days. If your family’s executor doesn’t file within the timeframe, the court may waive the executor’s appointment and instead move to appoint an administrator.

After filing the will, the probate process begins. The will is authenticated and accepted as the last testament of the deceased. The executor is then confirmed and given legal power to act for the deceased. 

Before distribution, the estate’s value must be inventoried and determined by using the date of death value or alternate valuation date specified by the Internal Revenue Code (IRC). The executor must pay taxes and debts owed by the deceased out of the estate, including personal income taxes and estate taxes. Once debts and taxes are paid, the executor must seek court permission to distribute the remainder of the estate to beneficiaries^[3]. 

Financial & Legal Considerations

Before assets can be distributed to heirs, the estate must first satisfy any outstanding debts or taxes. If the estate doesn’t include enough assets to satisfy debts, it’s considered insolvent. Probate may not be necessary if there are no assets available.

If the deceased died without a will, this is referred to as them having died “intestate”. The intestate estate must still undergo the same process, but probate will distribute assets based on prevailing state laws. The court appoints an administrator to act as an executor and must locate any legal heirs, such as surviving spouses, children, or parents.

Other issues can arise during probate, including disputes among heirs or difficulty locating all assets.

What Is Trust Administration?

Trust administration is the process of managing and distributing assets held in a trust based on the terms of the trust document once the trustor dies. The trustee manages the trust and has a fiduciary duty to act in the beneficiaries’ best interest.

Many trusts are common mechanisms for avoiding the probate process, maintaining privacy, and, in some cases, avoiding taxes.

Sarah-Jane Williams, Unregistered Barrister

Understanding the Trust Administration Process

If your loved one created a trust, it must go through trust administration. 

Primary Duties in Trust Administration

Trust administration involves identifying and valuing trust assets, paying any debts and taxes, and distributing the remaining assets based on the terms in the trust document. Trusts come in several forms, including:

• Revocable Living Trusts: These trusts allow the grantor to amend the terms during their lifetime while also allowing their estate to avoid probate. Upon the grantor’s death, assets can be transferred privately and seamlessly^[4].
• Irrevocable Trusts: When you create an irrevocable trust, your assets are permanently placed under the ownership of the trust, which acts as its own legal entity. You then act as the trustee until your death, at which point, the trust passes assets to named beneficiaries^[5]. Sarah-Jane Williams adds that it’s common for a third party rather than the grantor to be the trustee of an irrevocable trust.  
• Testamentary Trusts: These trusts are established within a will that doesn’t activate until after the grantor’s death. They typically address the needs of beneficiaries, such as an adult child with special needs. However, assets go through probate before the creation of the trust^[6].

Financial Responsibilities of the Trustee

The trustee must act in the beneficiaries’ best interest. They’re required to maintain accurate records and maintain transparent communication with beneficiaries. The trustee may also file tax returns and provide accounting information to beneficiaries.

Legal Considerations

Trustees must consider certain legal formalities while overseeing the trust. These may be determined by state law or by the terms within the trust document. Adhering to these formalities is necessary to ensure a smooth administration process.

Estates and Trusts Ensure A Smooth Inheritance Process

Both estates and trusts require strict adherence to ensure a smooth administration process. Patience and diligence can help manage this emotional and stressful process. If you’ve been named an executor or a trustee, legal and financial advice from a professional can help you ensure compliance with regulations and laws.

Written by Serena Tanner

Serena Tanner attended the University of Washington, where she earned a degree in philosophy after many detours delving into human rights, law, psychology, and social work. Health and holistic wellness topics continue to hold a special place in her heart. When she's not reading or writing, she can be found exploring the Pacific Northwest with her two children and dogs.

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Edited by Katelynne Shepard

Katelynne Shepard is a writer, editor and SME who is proficient at crafting and reviewing content. She has been a full-time copywriter and editor since 2011 and has written content for Fortune 500 companies, independent law firms, indie publishers, small-business owners and mainstream websites. She specializes in parenting, lifestyle, family law, personal injury, criminal law, immigration law, astrology, personal finance, education and health care. In addition to thousands of e-commerce product and category descriptions, Verle's work includes SEO blogs, social media posts and long-form informational articles.

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Subject Matter Expert Sarah-Jane Williams, LL.B(Hons)

Sarah-Jane Williams is a seasoned writer with a robust legal background, holding an LL.B (Hons) Bachelor of Laws and a Bar Training Course certification with a 'Very Competent' grade. She was called to the Bar at Lincoln's Inn. Her expertise as a legal SME is complemented by her diverse writing portfolio covering law, senior care, culture, and travel. With over a decade of writing experience, Sarah-Jane's work spans a wide range of subjects from engineering and health to pet care and spiritualism. Her global perspective is enriched by extensive travel and residences across four continents, enhancing her cultural insights and intercultural communication skills. Sarah-Jane's multifaceted background, including roles in housing, research, and advisory capacities, adds depth to her writing, making her a versatile contributor to any niche.