What Happens When a Loved One Dies?
Once a person is deceased, the Decedent is no longer able to manage or transfer their assets. Although a Will or Trust instrument may state the Decedent’s wishes, someone with legal authority to carry out those wishes must be appointed. That person is called an “Executor” or a “Trustee.” Executors and Trustees are “Fiduciaries.” A Fiduciary is held to a high legal standard; and is required to perform certain duties and to “administer” the Estate or Trust. In modern society, the administration process can be complicated.
Probate administration is a court supervised process, and the Executor of an Estate is an officer of the Court. Although Trusts are not required to be court supervised, the trust administration process is similar to an Estate and a Trustee is held to the same high standards. If a Fiduciary fails to perform their duties, or they perform those duties negligently, they may subject the Estate or Trust to unnecessary risk and expense. The Fiduciary may also be personally liable to the Estate or Trust, its creditors and/or its beneficiaries. If appropriate, the Fiduciary may also be removed as Executor or Trustee.
The administration process is designed to accomplish various goals and requirements. For example, a Fiduciary is required to:
- Carry out the Decedent’s wishes as expressed in the Will or Trust and to carry out the statutory requirements for distribution to the Decedent’s beneficiaries or heirs at law;
- Notify potential creditors of their prospective rights and properly address any legitimate claims;
- Notify the surviving spouse, heirs at law and beneficiaries of their rights and properly address elections and claims;
- Preserve, maintain, invest, collect, and take possession and control of assets of the Decedent;
- Avoid conflicts of interest and self-dealing;
- Provide an Inventory and Accounting to the beneficiaries for all the assets, liabilities, receipts, and disbursements of the Decedent and the Estate or Trust;
- Report to taxing authorities and pay any taxes due;
- Distribute assets according to law, including distributions to be held in further trust; and,
- Any other duty required by the Will, Trust instrument, or by law.
A Fiduciary may request compensation for their services. However, the amount of compensation depends upon the nature and value of the assets being administered.
As attorneys representing an Estate or Trust, we have the training and experience to guide the Fiduciary through the administration process. We advise the Fiduciary and make recommendations to keep the Estate or Trust out of legal trouble. To avoid risk, expense and liability, it is critical that a Fiduciary first seek qualified legal counsel and carefully consider any advice and recommendations before taking or foregoing action on behalf of an Estate or Trust.