PROBATE AND TRUST ADMINISTRATION
Probate and Trust Administration are alike in that each describes the process associated with the respective names. Probate is an established procedure wherein the county court (in Nebraska) is used for the filing of a case, the purpose of which is to settle the devolution of property owned by a decedent. Trust Administration, on the other hand, is the ongoing process for the settling of the interests described within the trust agreement. They are different in several respects, notably that in Probate there is a definite beginning and a definite end. Whereas, in trust administration, the process may, and usually does, extend over a longer period of time and incorporates other legal principals and issues. This law firm has extensive experience regarding both of these processes, and knows that clients must be given appropriate explanations to reach successful results:
a. If a person dies owning property which is not in some other fashion identified to a legal process whereby it becomes settled in some other ownership at the person’s death, a probate of this property will be necessary. The objective of the probate is to establish legal title to the decedent’s property in either the decedent’s devisees, if there is a will, or in the decedent’s heirs, if there is no will.
b. Property that the decedent might own could escape the need for a probate if that property had been structured, before death, in an ownership characteristic which is outside the claims of probate. Examples of this are: Property, whether real or personal, titled in a “joint tenancy” or some similar survivorship method, which settles property ownership in the surviving joint tenant (whether one or more). Contract interests survive the decedent’s death and are also outside of probate; such as a life insurance contract, or a contract for the sale of real property entered into by the decedent before death. There are other examples of types of property ownership which allow that property not to be included in a probate.
c. If there is property required to be probated, then there are two initial decisions to be made. Did the decedent die with a will, or not? If the decedent died with a will, then this will must be filed with the court which opens the probate. However, it the decedent died without a will, then a probate is opened in which the object is to determine the heirs of the decedent. These heirs are identified according to Nebraska Law which settles the respective rights of surviving family members - spouse, children, grandchildren, parents, brothers and sisters, and others. This statute, which provides the claim of the family members, is not always what an individual would want, which is the reason we faithfully say a valid will is a must.
d. A will is a legal writing which the decedent would have signed intending it to take effect after death. Because wills speak from the date they are written, and because situations change as life changes, it is important for wills to be often reviewed to be certain that it correctly recites the wishes of the writer. The subject of writing wills and being properly counseled how to get that job done, is a subject matter which an experienced lawyer can address - this law firm will provide that service.
e. Whether or not there is a will, the probate within the county court reaches the same ultimate objectives, which are: Determine what property the decedent died owning; determine who the property devolves to; determine how this property must be scheduled in an inventory; determine how death taxes might apply to the property ownership; determine an accounting for what transpired during the course of the probate; bring all procedures to a conclusion.
f. The key figure within the probate is the personal representative. This is a person or an entity who or which has the responsibility to complete the various tasks required during the course of the probate administration. The personal representative may, and usually is, named by the decedent in the will. If no will, then the law provides for an order of succession of who will occupy that position. Normally, the personal representative is a close family member, such as a spouse or a child. The task of the personal representative is to be the agent for the decedent to complete the various statutory procedures that are required in the Probate Code.
g. Probate administration is a time honored process to be certain that the wishes of the decedent are properly carried out. While there are alternatives (see “Trust Administration” following), probate serves well the interests of a decedent.
2. Trust Administration:
a. The key figure in trust administration is the trustee, similar in some respects to the personal representative in a probate estate. However, there are significant differences to achieve different results. Nebraska recently attended to the importance of this subject with the adoption of “The Nebraska Uniform Trust Code” - effective in January, 2005.
b. The tasks preformed by the trustee is key to the effectiveness of any trust. Accordingly, the selection of this trustee may very well be the most important decision the grantor will make. This trustee might be a close family member or a business advisor, or a professional who or which is set up in that capacity. Advice about who that trustee should be is a critical element of writing the trust and deciding what benefits are desired for the beneficiaries. Counseling about the use of a trust, no matter what its nature might be, is central to its effective use.
c. Elements of Trust administration – simply described but not an explanation of them - are: The trustee, with its principle place of administration in Nebraska, is subject to the jurisdiction of Nebraska courts; and so are the beneficiaries as to any issue which arises out of the trust administration. Registration of the trust with the court is optional; such registration is required only if the trust would say that. Trusts may be formed for any lawful purpose - pointed out because trusts are generally reserved for family or personal matters. Example: trusts for charities are of longstanding importance - and generally are created for advancement of educational or religious purposes, the promotion of health, a governmental or municipal purpose, or other matters within the community. A trust, under Nebraska’s Uniform Trust Code, may refer to a “written statement or list” used to dispose of items of tangible personal property - this is the equivalent of a similar provision in other Nebraska law which has allowed such a list as an attachment to a Will. Assets placed within a trust may be protected from the claim of a creditor of a beneficiary, under some specific conditions. For a number of years, trustees have been bound by what is referred to as the “prudent investor rule”, which is a particular function of the statutes.
d. Clients will find that an effective trust administration is one in which the client is fully knowledgeable about the process. This can happen only if there is close communication between the client and this law firm. Over time, effective counseling about the process of administration is equally important as the original writing of the document.