When planning for the end of life, you trust a lawyer to help you design an effective and efficient estate plan. Ensuring you select an experienced, knowledgeable lawyer who listens can help you attain the peace of mind of having a good estate plan. Understanding what your plans say and what will happen during estate and trust administration brings another level of peace of mind that things will happen as they should.
At Robbins Estate Law, we understand that a good estate plan centers around your family and loved ones. We can walk you through each step of estate and trust administration in Texas, ensuring you are comfortable and satisfied with your estate plan from start to finish.
What Is Trust and Estate Administration?
When a person dies, their property and debts become their estate, which typically goes through estate administration. If the decedent (deceased person) included one or more trusts in a will, the process may be estate and trust administration.
Not every estate administration includes trust administration and vice versa. An estate plan involving no trusts does not require trust administration, and a trust created somewhere other than your will is administered independently.
What Is Estate Administration?
During estate administration, a decedent’s loved ones identify their estate property, pay debts, and transfer asset ownership. This process begins in probate court, which appoints a representative to administer the estate. The process can vary depending on whether the administration is testate or intestate, dependent or independent, or fits into a special category.
Probate vs. Non-probate Assets
Property can be probate or non-probate. The non-probate property includes a transfer mechanism within its own terms, while the probate property does not. As a result, probate property goes through estate administration, while non-probate property transfers independently.
Steps in Estate Administration
Estate administration typically involves:
- Inform the probate court about the death and open estate,
- Request the court appoint a representative (executor or administrator),
- Identify legal heirs and other interested parties,
- Notify interested parties,
- Probate the will and respond to will challenges,
- Inventory estate assets and liabilities,
- Respond to creditors’ claims against the estate,
- Distribute remaining assets, and
- Close the estate.
You may also need to pay estate-related taxes.
Testate vs. Intestate Administration
When you die with a will, you die testate. When you die with no will, you die intestate.
Testate administration follows the will. If the will establishes a trust, testate administration may incorporate trust administration. Intestate administration involves identifying your legal heirs and distributing assets using Texas’s intestate succession laws.
Independent vs. Dependent Administration
The court requires dependent administration if those entitled to property cannot agree on how the administration should work. In dependent proceedings, the representative must get court approval to make most significant decisions, like paying debts, buying or selling property, and distributing assets.
During independent administration, you ask the court to identify heirs or probate a will. Then, those entitled to part of the estate can consent to independent administration. The independent representative may need to provide the court details about estate assets and liabilities. Otherwise, independent administration requires little oversight.
Special Administration Rules
If you leave a will and owe no debts except on real property, your estate may be probated as a muniment of title. Your estate may be probated through a small estate affidavit if you:
- Die without a will;
- Own no real property except a homestead that will go to your surviving spouse; and
- Have net estate assets of $75,000 or less, excluding your homestead.
In both cases, you bypass estate administration but not the entire probate process.
What Is Trust Administration?
Trust administration is the process of administering a trust according to its terms based on the type of trust and the property held there. Different people play different administration roles.
Trust Property
You can place almost any type of property into a trust. Many trusts include money held in financial accounts, but they can also hold title to real property, personal property, securities, and investments.
Roles
Every trust must involve at least three roles. The first is the trust creator, also called the grantor or settlor. The second is trust beneficiaries, who may benefit from the trust in the present or the future. The third is the trustee, who manages the trust.
Trust Variations
Funding of a trust may occur while the grantor is alive—a living trust—or after the grantor dies—a testamentary trust. The grantor may retain the power to dissolve the trust—a revocable trust—or relinquish the right to dissolve the trust—an irrevocable trust.
Administration
Typically, the trustee is primarily responsible for administration. The trustee is a fiduciary, meaning they are legally required to manage the trust according to its and its beneficiaries’ best interests. The trustee’s administrative powers may include:
- Using assets to help a beneficiary,
- Investing assets,
- Buying or selling property,
- Dispersing funds to beneficiaries, and
- Managing taxes.
If the trust is revocable, the trustee may owe additional obligations to the grantor.
Get Help with Trusts and Estate
Although this article provides a general overview, every estate is different, and every estate plan should be tailored to the person and family at its center.
Contact us to discuss details, including how estate and trust administration might look in your unique situation.
Kyle Robbins
Kyle Robbins is the founder and sole owner of The Law
Offices of Kyle Robbins. He received his J.D. with honors from the University of Texas School of Law and his B.S. in Food Chemistry and Microbiology from Oklahoma State University.
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