Probate administration and trust administration are two very different procedures for administering a decedent’s estate. Among other differences, while probate administration involves dealing with the Florida courts, a trustee can administer a decedent’s trust without court involvement.
When coping with the loss of a loved one, administering his or her final affairs is a difficult – but necessary – part of the process. In order to determine what this will entail, the first step is to review the estate plan. Did your loved one leave a will? A trust? Did he or she prepare both? Answering these questions will allow you to determine the extent to which your family will need to deal with probate and whether you will also be dealing with trust administration.
Probate Estates vs. Non-Probate Estates
When a person dies in Florida, the assets that he or she (referred to as the “decedent” in legal terms) leaves behind form the decedent’s estate. By default, all assets fall into the “probate estate,” meaning that they are subject to probate administration in the Florida courts. However, any assets placed into a valid trust are not subject to probate, and along with any other non-probate assets, they form the non-probate estate.
Probate Administration: The Basics
Probate is the formal court process for distributing a person’s assets pursuant to the terms of his or her will (or Florida’s law of intestate succession – see below if your loved one did not leave a will). There are two types of probate in Florida: formal administration and summary administration. Formal administration is the standard process, while summary administration involves simplified procedures and is available in situations where more than two years have elapsed since the decedent’s passing, or his or her probate estate is worth less than $75,000.
With both types of probate, the process begins with the decedent’s personal representative filing a Petition for Administration with the appropriate court. If the decedent left a will, the will most likely designates someone to serve as a personal representative of the probate estate. During the initial stages of probate, the probate judge will determine the validity of the decedent’s will. And in formal administration, the judge will issue “Letters of Administration” that authorizes the personal representative to act on behalf of the probate estate.
Once appointed and authorized by the court, the personal representative will take all steps necessary to administer the decedent’s probate estate. At the end of the probate process, the court will “close” probate, and the process will have a formal end (this can be somewhat different with trust administration, as discussed below). In order to close the estate, the personal representative must generally take steps including:
- Identifying, collecting, and safeguarding the assets that comprise the decedent’s probate estate;
- Providing adequate notice to the decedent’s creditors (as a general rule, eligible creditors have the right to be paid before estate assets are distributed to the decedent’s heirs or beneficiaries);
- Paying valid creditor claims and disputing improper claims to payment from the probate estate;
- Filing necessary tax returns and paying all applicable taxes;
- Engaging the services of accountants, appraisers, investment advisors, and other professionals as necessary in order to administer the probate estate consistent with the personal representative’s fiduciary duty;
- Distributing the remaining assets in the probate estate to the decedent’s heirs and/or beneficiaries; and,
- Submitting the necessary court filings in order to formally close the probate estate.
While this may all seem daunting, in most cases, dealing with probate is a fairly routine and straightforward process. If you have been named as a loved one’s personal representative, hiring an experienced probate lawyer will allow you to make decisions with confidence and ensure that you avoid mistakes that could negatively impact your loved ones and/or expose you to personal liability.
Trust Administration: The Basics
Trust administration is fundamentally different from probate administration in that it is not a court-supervised process. The “trustee” serves in a role comparable to that of the personal representative in probate administration and administers the trust according to its terms as well as the requirements of Florida law.
Trusts can be used for a variety of different purposes during the estate planning process, and there are different types of trusts that can have different requirements. For example, while the revocable living trust is commonly used to distribute assets to children and other family members outside of the probate process, charitable trusts and special needs trusts have discrete purposes and tend to be subject to more stringent requirements.
Unlike probate administration, efficiently closing the non-probate estate is not necessarily the end goal of trust administration. Trusts often include provisions that require them to be administered for years, if not decades. For example, if a trust is established for the benefit of the decedent’s minor children, it may call for the trustee to manage the trust until the children reach the age of majority (or perhaps until they are older) before disbursing the remaining trust assets in one final lump-sum payment. Certain types of trusts can continue in perpetuity, with the trustee having an ongoing obligation to invest, manage, and disburse trust assets for the benefit of the trust’s beneficiaries. Similar to a personal representative, a trustee will generally have the authority to hire accountants, investment advisors, lawyers, and other professionals to assist as needed.
What If My Loved One Died without an Estate Plan?
If your loved one died without an estate plan, then his or her entire estate will need to be administered through probate. A personal representative will need to be appointed by the court. And once all creditors and taxes have been paid, the remaining estate assets will be distributed to the decedent’s heirs according to Florida’s law of intestate succession.
Speak with an Estate Administration Lawyer in Confidence
If you would like more information about the steps involved in probate administration or trust administration in Florida, we invite you to speak with one of our experienced estate administration lawyers. To request an appointment at our law offices in Jacksonville, FL, please call us or inquire online today.