As probate planning and estate attorneys in Memphis who prepare wills and trusts, we also advise the administrators of the estates of deceased clients.
There are two options by which a person can direct the transfer of his or her property at death, either a Last Will and Testament or a Revocable Living Trust. These options have very different types of administration at death. The Last Will and Testament-centered plan requires a Probate Court administration while a Revocable Living Trust-centered plan can avoid the Probate process.
Before assets can be distributed pursuant to a Last Will and Testament (Will)-centered estate plan, the Will must be Probated. In other words, the Will must be admitted to Probate by a Probate Judge before a Will becomes effective. The Personal Representative, or Executor, named under the Will can be given Letters Testamentary from the Probate Court. These Letters Testamentary are required to transfer assets from the name of the decedent to the beneficiaries named in the Will.
The Probate process may result in a bond required of the Personal Representative and annual accountings. Before the Probate estate can be closed, a state inheritance or estate tax return must be filed and the beneficiaries must sign a receipt for the assets received under the Will.
REVOCABLE LIVING TRUST ADMINISTRATION
The Probate process is completely avoided at death if the decedent has a funded Revocable Living Trust-centered plan. The named trustee of the trust administers the trust estate without the interference of the Probate Court. The trustee is not required to post a bond or to file annual accountings with the Probate Court. The trustee is able to file only the necessary tax returns, pay the valid debts of the estate and distribute assets to the beneficiaries named in the trust.
There are other benefits, of course, that flow from Revocable Living Trust-centered planning, such as complete privacy, avoiding multi-state Probate problems, protecting minors and dependents with special needs, and generally making the ultimate transfer of assets a much more efficient process.