Probate & Estate or Trust Administration
Most of us experience extraordinary grief at the loss of a loved one. But it is often the surviving spouse, adult child or sibling of a deceased who is tasked with serving as the Personal Representative of the deceased’s estate. The Personal Representative is responsible to oversee the probate of a Will or the administration of an estate; either involves a court process that takes several months to a few years to complete.
Before anyone can take charge of estate assets, a court must appoint someone to serve as Personal Representative. That is accomplished by petitioning a court. Upon that appointment, the Personal Representative is issued “Letters Testamentary” which give him or her authority to act on behalf of the estate. The Personal Representative must then give proper and timely notices to beneficiaries and creditors of the estate; timely prepare an inventory of the estate’s assets; publish notice in an appropriate newspaper; obtain any required appraisals; keep the beneficiaries informed of all matters that may affect their rights; pay claims of certain creditors and deny or settle other claims; file any required tax returns; pay taxes owed by the deceased or the estate; distribute assets or proceeds to beneficiaries in accordance with the deceased’s will or Arkansas law; and attend to many other details. A Personal Representative owes a fiduciary duty, and a duty of fairness and impartiality, to all beneficiaries of the estate and can be removed or fined if proven to have been guilty of gross misconduct or mismanagement. The representative is also subject to being sued for breach of fiduciary duty.
If Corley Law Firm is engaged to assist you we will outline vital steps necessary to preserve and manage estate assets, identify trusted resources to help you, and answer the questions which always arise. We will also handle all of the court pleadings, orders, notices and certified mail, and advise you which expenses should or should not be paid, the documentation required for reimbursement, and how to minimize your potential liability to heirs, creditors or tax authorities. Prompt engagement of experienced counsel can reduce not just your stress level but also the cost of administration and the time until assets can be distributed. Arkansas statutes prescribe a fee for a Personal Representative separate and apart from any fee for the estate attorneys. So engaging an attorney will not affect any fee payable to the Personal Representative.
You can better protect the assets of a deceased person’s estate and the interests of the beneficiaries, protect yourself from liability for breach of fiduciary duty, and help the entire process go smoothly, if you gather all of the needed information at the beginning stage. Corley Law Firm has forms and procedures in place to assist you with this task.
Small Estate
If you are dealing with an estate valued at less than $100,000, exclusive of the home, you may be able to proceed with an Affidavit for Collection of Small Estate, which is an abbreviated court process. However, an Affidavit cannot be filed until at least 45 days after the death, and the beneficiaries of the estate must be able to pay all claims against it without using assets of the estate to do so. And, if the deceased owned real property outside of Arkansas an Affidavit often is not sufficient to allow ancillary probate in that other state (which is needed to obtain and transfer clear title to real property).
Trust Administration
The administration of a trust rarely entails court intervention or oversight; for that reason, it is typically a much quicker and less stressful process than the probate of a Will or the administration of an estate of someone who died without a Will. Still, the successor trustee owes fiduciary obligations to the trust beneficiaries.
When a trust is created, a Certification of Trust is typically prepared to describe the trust by name and date, state the name and address of the initial trustee, state how assets in the trust are to be titled, and provide certain other basic information to third parties who will need to deal with the trust. This Certification avoids the need to give a complete copy of the trust to third parties, and thereby keeps the provisions of the Trust private.
A successor trustee will need to establish and document his or her authority to assume control of trust assets. This is most often accomplished by signing an Acceptance of Trusteeship and obtaining a new Certification of Trust. An affidavit of death or mental incapacity may also be needed to document the successor trustee’s right to assume this role. If an initial trustee simply elects to resign, whether due to convenience, old age or other cause, a Resignation of Trustee may be needed before the next person named to step in can serve as trustee. And, because many revocable living trusts use the social security number of the trust maker, a new tax identification will need to be obtained when a trust maker is no longer serving as trustee. When a successor trustee takes control notice to certain parties may also be required.
A trustee has a duty to protect, manage and preserve the assets in the trust and protect the interests of the beneficiaries. Once the trust makers are no longer the beneficiaries of the trust, a trustee is required to prepare an annual report which details all of the assets owned by the trust. Beneficiaries want to know what they might inherit and creditors want to know if there is enough money to pay them. Certain property may have to be appraised before it can be sold or distributed. This can be critical to obtain a step-up in basis – to reduce the capital gains tax on subsequent sales of property distributed from the trust.
If we assist you with the administration of a trust we can read and interpret the trust and advise you regarding its terms, and prepare the acceptances, certifications, affidavits, notices and other documents needed for the successor trustee to take control. We can also obtain a new tax identification number for the trust and answer your questions.
If you would like our assistance with the probate of a Will or the administration of an estate or a trust, please request a consultation and we will send you a Questionnaire. If you bring the completed Questionnaire with you to the appointment, with attachments, a consultation is free up to one hour. At that time, we will review your Questionnaire, answer your questions, and give you a brief overview of the process. If you engage us, we will ask you to sign an Engagement Agreement and pay a deposit (typically at least $3,000) against which we will bill expenses and our time on an hourly basis, in one-tenth of an hour (6 minute) increments. You may be asked to replenish this deposit from time to time as fees are earned. If the matter is concluded without us earning all money, then held by us we will promptly refund any excess. We will accept a Visa or MasterCard, but we assess a 3% surcharge when doing so. Some or all of our fees may be reimbursed by the estate or trust, and in some cases, we will accept the statutory fee for our services. We would consider it an honor to help you at this difficult time.