As probate planning and estate attorneys in Memphis who prepare wills and trusts, we also advise the administrators of the estates of deceased clients.
There are two options by which a person can direct the transfer of his or her property at death, either a Last Will and Testament or a Revocable Living Trust. These options have very different types of administration at death. The Last Will and Testament-centered plan requires a Probate Court administration while a Revocable Living Trust-centered plan can avoid the Probate process.
PROBATE ADMINISTRATION
Before assets can be distributed pursuant to a Last Will and Testament (Will)-centered estate plan, the Will must be Probated. In other words, the Will must be admitted to Probate by a Probate Judge before a Will becomes effective. The Personal Representative, or Executor, named under the Will can be given Letters Testamentary from the Probate Court. These Letters Testamentary are required to transfer assets from the name of the decedent to the beneficiaries named in the Will.
The Probate process may result in a bond required of the Personal Representative and annual accountings. Before the Probate estate can be closed, a state inheritance or estate tax return must be filed and the beneficiaries must sign a receipt for the assets received under the Will.
REVOCABLE LIVING TRUST ADMINISTRATION
The Probate process is completely avoided at death if the decedent has a funded Revocable Living Trust-centered plan. The named trustee of the trust administers the trust estate without the interference of the Probate Court. The trustee is not required to post a bond or to file annual accountings with the Probate Court. The trustee is able to file only the necessary tax returns, pay the valid debts of the estate and distribute assets to the beneficiaries named in the trust.
There are other benefits, of course, that flow from Revocable Living Trust-centered planning, such as complete privacy, avoiding multi-state Probate problems, protecting minors and dependents with special needs, and generally making the ultimate transfer of assets a much more efficient process.
Lawyer Insight: The 4 Steps to Probate
Compassionate Memphis probate & estate administration lawyers understand just how complicated the process of probate may be for those who are not familiar with legalities. Probate is the official process of verifying the reliability of a will and ultimately carrying on the wishes as listed in the document. The executor is the person the decedent chose in the will to protect and handle assets after death. Family members and friends of someone who recently passed, may not be sure what probate entails.
Experienced probate & estate administration lawyers at Patterson Bray in Memphis can answer any questions you may have about probate. Here we have summarizes probate in eight simple steps:
1) A petition is filed to the court and a hearing is held.
Probate begins after a petition is filed to the court, then a hearing is held where the will is presented and verified. The executor is identified and either accepts or denies the role. Beneficiaries are informed about the hearing, so they can speak up about objecting to the petition if they want.
2) The executor uncovers all decedent’s assets and makes a list.
The executor must then find and create a list of all assets within the decedent’s estate. As you can imagine, compiling everything a person has accumulated in his or her lifetime can be an extensive task. The decedent may have left behind a file regarding assets and informed the executor or where this is prior to passing away. If so, the task of identifying all assets may be much easier. However, many executors feel so daunted by the task they have no idea where to begin. The Memphis probate & estate administration lawyers at Patterson Bray would be happy to give you tips on how to start.
3) The executor protects and manages the estate during probate.
The entire process of probate may take anywhere from just a few months, up to year or longer. So during this time, the executor must safeguard the estate until probate is complete. Creditors may have come forward after receiving notice of the passing, with claims that money is owed. The executor must decide if these claims are valid, and if they are, paying these parties directly from money in the estate.
4) Communicate with beneficiaries.
A role that an executor may not have anticipated needing to do, was keeping beneficiaries aware about what is happening with the decedent’s estate. It may even be required for the executor to send updates on a regular basis to beneficiaries until probate ends. As soon as all else has been handled, the beneficiaries receive what is owed to them as described in the will by the decedent.
Whether you are a will executor, beneficiary, family member or other concerned loved one, you can take meet with a probate & estate administration lawyer at Patterson Bray about your Memphis, Tennessee probate concerns. We offer free appointments for new clients, so please take us up on this opportunity. We understand that you may be grieving the loss of someone you cared deeply about. Our Memphis probate & estate administration lawyers can offer compassionate yet knowledgeable legal services during this time, so call today to get the help you need.
What Your Estate Planning Attorney Should Know About Asset Protection Planning
Asset protection planning is a complex area of estate planning law. You may be wondering what experience your estate planning lawyer from Patterson Bray needs to have if planning your estate.
Taxation
Understanding tax law is one of the key areas of estate planning. One of the key motivations for doing estate planning is to avoid confiscatory taxes when passing your wealth on to the next generation. Making mistakes when planning your trust would negate the entire purpose of doing the work in some cases, and expose your estate to great risk.
It’s not all about the IRS. State tax law is often aggressive about attempting to impose tax on an asset protection trust. So your lawyer must be familiar with the laws of the states in which the trust will be set up and the states where the family members may live now or in the future.
Legal Entity Formation
An asset protection trust is a legal entity, similar to a business. If your lawyer is unfamiliar with legal entity formation, and fails to create the right type of trust and maintain proper records, a creditor or even a family member may try to pierce the corporate veil of the trust and open it to problems. If the trust doesn’t operate in a way that maintains it as truly distinct from the owners, you can have serious problems.
Bankruptcy and Credit Law
In many cases, an asset protection trust is put into place as a shield from creditors who are trying to bring claims against a family’s wealth. You can expect the other side in litigation of this nature to be sharp, determined lawyers who understand credit law. Your own counsel needs to be as good or better than they are.
Fraud Law
An asset protection trust is often heavily scrutinized for the possibility of fraudulent transfers of funds. It’s important that your lawyer’s creation of your trust is done in a way that is above board and not subject to legal action in the future. If you don’t maintain the trust in a way that holds it above board, you can expect legal issues.
Preserving Wealth for the Next Generation
An asset protection trust should be designed, above all else, for preserving the estate’s wealth for generations to come. For that reason, keeping the trust from the decisions of future family members is as important as avoiding estate tax or creditors.
For all of these reasons, your estate planning lawyer in Memphis, TN from Patterson Bray needs to be well versed in all of these areas of the law. Make sure they have experience in creating asset protection trusts.