This feature examines the administration of trusts after the death of their holder. Laura Nelson-Becker, an estate planning specialist, provides insight into the process and the crucial role played by lawyers throughout.
To give you some context, what are the main steps in estate administration after a person’s death in your jurisdiction?
California’s estate administration procedures depend on the assets of the deceased and whether there was a living trust. Administration can be done privately and quickly if there is a trust in place.
Many people believe that living trusts can be completely avoided from administration. This is false. Even though trust administrations are largely done outside of the court’s jurisdiction, there are still important administrative tasks to be completed. It is necessary that the successor trustee fulfills his or her fiduciary obligations to beneficiaries.
A trustee will be responsible for managing routine trust assets. This includes sending out information and notification to beneficiaries, collecting assets, accounting to beneficiaries and addressing debts. Unless the trust instrument states otherwise, trustees are entitled to reasonable compensation.
Trust administration can often result in significant cost savings even if the trustee is represented. Trustees should avoid lawyers that charge fees based upon a percentage of trust assets. This almost always compensates the attorney. Flat rate billing or hourly billing can result in lower attorney fees.
If the decedent dies after April 20, 2022, and the estate has a value less than $184,000.500, simplified procedures will apply. Probate is not required. To transfer assets that are not subject to probate, such as assets in joint tenancies or with pay-on death beneficiary designations, it is not necessary to file a probate.
I recommend trustees not to pay attorneys based on a percentage value of trust assets. This almost always compensates the attorney.
If the estate of the deceased exceeds $184,000.500 and there is no living trust, the estate must be probated. The probate court oversees the administration of the estate. Even if there was a will, probate is necessary. First, petition the court for probate administration. After the hearing, the court can appoint a personal rep to manage the estate. The personal representative will be responsible for managing creditors, handling tax returns, inventorying and valuing estate assets, and requesting court orders regarding distribution.
Personal representatives are entitled to compensation for their work in administering an estate. California Probate Code determines the compensation a personal representative is entitled to. It is a percentage from the estate’s value. Personal representatives who are beneficiaries of an estate may waive compensation, as compensation is taxable income. The Superior Court of California for the County of Santa Clara has a great website that explains the steps involved in probate administration.
What is the expected time frame?
There are many factors that affect the time required to administer a trust or estate. A trust administration takes nine months to one year, but a probate takes longer. According to California’s average probate, it takes anywhere from 1 to 18 months to complete. Due to the large caseloads that the probate courts currently handle, much of the delay can be attributed to waiting for court availability. Some counties are more affected than others. Additional time is required for complications such as sales of real estate, claims by creditors, and other issues.
It is also common for self-represented people to have difficulty following the technical requirements of probate administration. This can delay the completion timeline. A continuance can be caused by neglecting even the smallest procedural detail. This could lead to additional delays that may last for months.
Is there any particular obstacle to estate administration?
Family disputes are the most common issue I see in my practice. These disputes can have roots in family dynamics and deep family history, but they often manifest themselves as legal disputes about property ownership or entitlements to distribution. These disputes could lead to contests regarding the validity of wills or trusts, such a lawsuit alleging undue or insufficient capacity or undue influence, or lawsuits claiming an interest in estate assets, or wrongdoing of fiduciaries.
Family disputes are the most common issue I see in my practice.
These issues can be dealt with, or prevented from becoming a problem.
It is essential to plan your estate carefully and in a thoughtful manner. Drafting attorneys must be able to see the potential problems that could arise in different situations and have foresight. If clients plan to leave an heir behind, the drafting lawyer should document their intent clearly and in a manner that minimizes the possibility of litigation.
For example, drafting attorneys should be aware of situations where an individual seems to be too involved in the elderly or dependent client’s relationships with them. This could include scheduling meetings, attending meetings, filling out forms or otherwise directing representation. These situations can lead to future problems and drafting lawyers need to be alert so that they can respond appropriately.
What advice would your family give recently grieving families that are beginning to organise their loved one’s estate plan?
It is important to allow yourself to grieve. Families can get caught up in the administrative and legal tasks and become overwhelmed. Most situations don’t require immediate action so families can allow themselves to be patient and focus on the important things first. The earliest deadline for estate administrations is typically no more than 30 days.
They should collect all legal documents of the deceased before they can move on to the administration. This will enable them to determine the type of administration required and if they need to involve the court.
These circumstances make it a great benefit to have a lawyer as your advocate.
Both estate planning and administration are crucial components that require the assistance of lawyers. A good lawyer can help you create a comprehensive and thoughtful estate plan that will simplify administration after your death. An attorney can help you navigate the difficult process of estate administration. Many technicalities are involved in trust and estate administrations. Neglecting to comply with these requirements can lead to significant delays and costly results. Trustees and personal representatives have important fiduciary responsibilities and must fulfill them with respect. Even the smallest mistakes can lead to liability and unnecessary conflict.
A fiduciary’s lawyer ensures that the client is fully informed about their obligations and protects them from any potential liability. A trustee can hire an attorney, and pay fees from trust assets. The amount of attorney compensation for a probate administration is set by the Probate Code. All attorneys will be charged the same amount for administration work. The court will not charge the attorney fee until it is ordered. It is due at the end of probate.
Laura Nelson Becker
263 Main Street Placerville, CA 95667 USA
Tel: +1 530-295-6400 | +1 530-617-1692
Fax: +1 530-663-8459
Laura Nelson Becker is a Becker Nelson Center & James partner who focuses almost exclusively on the area of trusts and estates. Since 2017, she has been certified by the State Bar of California Board of Legal Specialization as a specialist in Estate Planning and Trust and Probate Law. Laura is a regular litigator in trust and estate disputes. She handles will contests and claims against fiduciaries.
Becker Nelson Center & James offers legal services to individuals as well as businesses throughout Northern California. They handle matters in real-estate, business, labour, employment, estate planning, administration, civil litigation, family and personal injury, and trust and estate litigation.