Estate & Trust Administration

Estate Administration refers to the process by which assets are re-titled into the correct person(s) or entities to which the probate code, Will or Trust instructed that they be titled. This refers to both probate assets, or assets which were part of a decedent's estate at the time of their death whether passing by operation of law or by Will or non-probate estate which includes beneficiary designated accounts, jointly held assets with the right of survivorship, retirement benefits with living beneficiaries, life insurance with payable living beneficiaries, transfer on death (TOD) accounts, assets held in a life estate, and assets which are part of a trust left by the decedent.

Estate Administration is by its very nature an emotionally complicated process by which the assets of the dead are transferred to the living. The process can be further complicated by new and pre-existing issues within the family or between the family and the beneficiaries. This is especially true when a child or family member who thought they would be receiving a benefit is instead given less than what they expected or nothing at all. This can lead to all manner of issues during the administration of the estate up to and including litigation. This is one of the reasons it is critical to have correctly drafted, understood and executed documents prior to death, especially if you intend to have a distribution that may or is likely to cause problems.

A benefit of trust administration or non-probate administration is that ancillary probate can be avoided. Ancillary probate means having to open probate in another state in addition to Pennsylvania. This is common with camp properties, vacation homes and snowbirds owning property in another state. Owning that property in a trust or corporation means that no ancillary probate is necessary.

One of the crucial issues with estate administration is determining what assets are part of probate, which are not part of probate and which actually need to be administered. This is paramount as Pennsylvania imposes an inheritance tax on assets that pass from a decedent who was a citizen of Pennsylvania at the time of their death. There is a discount available if the estate 'pre-pays' on inheritance taxes 90 days after the death of the decedent.

A common issue with estate administration is discovering that beneficiaries in the non-probate assets do not 'match' what it appears that the decedent was attempting to accomplish with the probate assets. This can lead to additional litigation such as when the decedent updated their Will to reflect the removal of a child but their life insurance and retirement accounts (which often comprise the bulk of an estate) were never updated to do the same. The beneficiaries of the Will may argue that the decedent would have updated all the documents had they known that the Will does not control non-probate assets.

However, compare from if the Will had the majority of the assets and the decedent had intentionally omitted a child in a Will they executed the night before they died. The other children were all present that night and did not like the child who was omitted despite the decedent and omitted child otherwise having a close relationship for decades. If the omitted child chooses to contest the Will, they may argue that the Will is invalid and that the administration should not proceed. This is a Will contest.

So what if the administration does proceed, there are no contests, how long does that typically take? Around nine to twelve months in Pennsylvania on average from the opening of the estate to the closing of the fiduciary return. This is why so many executors [and often their learned estate counsel] get calls for the distribution of assets weeks, days or even hours after the decedent dies. Unfortunately, it is between the executor and the courts to determine when distributions occur, along with advice from counsel.

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