Probate vs. Trust Administration: What You Need to Know
By Juli Findling, Paralegal
Administering a decedent’s probate estate under a will is not the same as managing a decedent’s trust estate. While there are similarities, the differences and the value these differences provide can be significant. So that you and your family can make informed decisions about whether or not to establish a trust outside one’s will, here’s what you need to know.
First and foremost, the probate process is court-supervised and made available to the public, including publication of a notice in the local newspaper about the decedent’s estate. All of the documents in the court’s file, including the decedent’s will (if there is one), are available for anyone to see. Second, costs associated with probate can be substantial, with court filing fees for each petition (typically two) and newspaper publication costing upwards of $1,000. In addition, there may be attorney and personal representative fees, which are based on the value of the estate and average about 5% of the estate value. Finally, probate can take a very long time and be quite taxing on the decedent’s family. In general, the time it takes to settle an estate in Georgia ranges from 12-18 months.
Why does probate of a will take so long? Probate usually involves three distinct phases. The first phase is called the appointment phase and can take up to three months. During this phase, the decedent’s family or attorney is charged with locating the person who the court will appoint to represent the estate, called the executor, administrator or personal representative. Timing, from there, can depend on many things – whether or not the decedent had their affairs in order prior to their passing, how timely the heirs complete required court documents, as well as the pace at which the court in the county handling the probate process moves. Phase two, the administration phase, takes a minimum of four months. It is at this point that the estate’s attorney or personal representative is charged with identifying and possibly selling the estate’s probate-able property, working with creditors to settle outstanding claims, figuring out who gets distributions from the estate, and managing most other related estate affairs. The attorney or personal representative is required to publish notice in the newspaper, which runs for four weeks. The estate remains open for another three months to give potential creditors time to come forward to make their claim against the estate. Finally, there is the distribution and discharge phase, when the representative of the estate is relieved of their duties, as such, and the estate is officially closed. This closing process can take up to another three months. As with the first phase, the attorney or personal representative depend on the heirs to turn around more signed documents and the county court to move things through their system.
What are the similarities between probate and trust administration? Both probate and trust administrations require five basic steps.
- Estate assets are collected, safeguarded, inventoried, and appraised for tax and distribution;
- Decedent’s creditors are notified and all just debts are paid;
- Tax obligations are settled;
- Debts and expenses of administration are paid;
- Beneficiaries of the estate are informed of administration and accounting and distributions are made to beneficiaries and heirs.
What are the major differences? A properly constructed trust establishes a complete plan for the protection and transfer of a decedent’s estate assets privately and more cost effectively. Trust administration does not require newspaper publication or court petitions (except when absolutely necessary), and the trustee and attorney are paid on an hourly basis, with no additional court and publication fees. A trust can protect one’s legacy from unworthy heirs, creditors, and/or irresponsible beneficiaries and can provide family and loved ones more of the peace of mind they deserve.
For more information regarding probate or trust administration, please contact us at 404-255-7400 or info@hoffmanestatelaw.com.
