What Happens To A Trust After Death? What Happens In Trust Administration?
When a client elects to employ a trust for estate planning purposes, the client actually has the authority to determine if the trust will distribute all property upon his/her death or continue for the benefit of certain beneficiaries. The trust document itself provides for the distribution scheme upon the creator’s/client’s passing. The trust is its own roadmap and a trust beneficiary should review the trust with a knowledgeable estate planning attorney after the creator’s death to determine if the trust continues or requires immediate distribution to the beneficiary.
Regarding trust administration, with a lifetime trust or standalone trust, the trust springs into being as soon as it is signed by the creator and trustee, and the trust can be funded immediately. With a lifetime trust or standalone trust, trust administration begins as soon as the trust is created, which is always prior to the creator’s death. While a lifetime or standalone trust requires immediate trust administration upon creation, most clients think that trust administration begins upon funding, because before the trust is funded, there is little for the trustee to accomplish. In terms of asset administration, which is typically the largest and most difficult aspect of trust administration, the trustee has a fiduciary responsibility to invest all asset as would a person of reasonable prudence and to distribute asset as spelled out in the trust document.
Unlike standalone trusts, testamentary trusts only spring to life when the Last Will and Testament they are contained in is admitted to probate. For this reason, trust administration for testamentary trust cannot begin before the creator’s death. The trustee of a testamentary trust does not begin to administer the trust until the following actions have taken place: 1) the creator’s Will is admitted to probate; 2) the executor of the estate collects estate funds and deposits them into an estate account; 3) the executor of the estate passes assets to the trustee of the testamentary trust; and 4) the trustee of the testamentary trust sets up a testamentary trust account and deposit asset into the trust.
What Situations May Lead To Estate Litigation?
I actually find that estate litigation is becoming more common. People are living longer, and there are more concerns regarding a deceased person’s capacity at the time a particular document was signed. Add to this the prevalence of websites that sell “do it yourself” estate planning documents and the increased value of wealth transfer from one generation to the next, you have a perfect storm.
Among the areas of estate litigation, which include, but are not limited to, contesting a trust, contesting a Power of Attorney and suing an executor/trustee who has stolen or mismanaged money, by far the most common area of estate litigation is the Will Contest. The second a Will is offered for probate; the possibility of a contest ripens. This is because after offering a Will for probate in New York, the Court will summon all of the deceased person’s heirs-at-law, or distributees, and allow them to examine the attorney who drafted the Will, if any, and the Witness to the Will’s execution. These examinations, called 1404 examinations, are allowed before a distributee decides whether or not to file a formal objection to the Will with the Court. The usual grounds for contesting a Will include an allegation that the deceased person was unduly influenced or didn’t have the required capacity when he/she executed his/her Will. The other grounds for contesting a Will are if the signature on the Will was a forgery, if the deceased persons was under duress when the Will was signed or if the Will was not properly executed in conformity with the laws of the State of New York.
What Is The Role of An Attorney In The Probate Process?
Probate is the process of having a deceased person’s Last Will and Testament validated by the Surrogate’s Court. The person who is named/nominated as Executor in the Will should contact an attorney knowledgeable in estate administration matters.
Having a Last Will and Testament admitted to probate in New York requires that a probate petition be prepared and executed, that the original Last Will and Testament of decedent be filed with the Surrogate’s Court, that the required Court filing fee be paid and that heirs-at-law, or distributees, either sign a Waiver document or be summoned to Court to explain why they agree that the Will should be admitted to probate or denied probate. Assuming all Court required documents have been filed, and further assuming nobody objects to the Will being admitted to probate, the Court will issue a decree, appoint an Executor and formally admit the Will to probate, after which, the process of estate administration begins.
If a New York resident dies without having a Last Will and Testament then anybody who is an heir-at-law, or distributee, of the deceased should meet with an attorney knowledgeable about estate administration so the family can begin the process of having an Administrator appointed to administer the decedent’s estate. Unlike with a probate proceeding, the Administrator of the estate will make distributions pursuant to the New York State laws of intestacy, and not pursuant to a Last Will and Testament. However, like in a probate proceeding, the Administrator still has the responsibility to collect estate assets, open an appropriate estate bank account and make appropriate distributions.
For more information on Trust Administration After Death In New York, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (516) 888-5381 today.