Probate and Trust Administration
What is Probate?
Probate is the court-supervised transfer of property from a deceased person (decedent) to their heirs and beneficiaries. If the decedent had a will, the will names who will receive the decedent’s estate. If the decedent did not make a will, state law identifies the heirs of the estate.
Oregon has also recently enacted legislation called the “Harmless Error Rule.” There are cases in which the decedent’s testamentary intent cannot be given legal effect due to an error or omission in their will. State law may provide a legal remedy where decedent’s intention was clear, but a technical defect in the execution of the will makes the will invalid. The Harmless Error Rule disregards a will’s formal statutory requirements, focusing instead on whether the testator intended the document at issue to be their will. These circumstances must be evaluated on a case-by-case basis. The following words of appreciation for our office’s work are from a client whose uncle’s will was accepted under the harmless error rule as valid.
“You [Nell Bonaparte] are a beacon of expertise, wisdom, heart, and strength. We are eternally grateful for you more than you will ever know. After my husband’s stroke five years ago the gift you helped us to receive from my uncle was what has assisted our family. We are so very grateful. the way you tell your story online can make all the difference.”
Probate is an orderly court process that typically lasts at least six months to one year. We can help you understand and conduct the process.
The Probate Process
We can help identify the proper person to act as personal representative and work with them to open a court proceeding by preparing a petition. The petition is filed with the court and reviewed by a judge before the personal representative is given authority to settle the decedent’s affairs.
Once appointed, the personal representative is generally tasked with:
Identifying and notifying interested parties that a probate has been filed.
Consolidating the decedent’s assets and preparing an inventory of assets for the court.
Identifying the creditors of the decedent’s estate and verifying that sufficient assets exist to pay all creditors.
Providing notice to unknown creditors of their right to claim against the estate by publication in a newspaper.
Filing final tax returns on behalf of the decedent.
Making any specific distributions of the decedent’s property set forth in the will.
As needed, the personal representative may seek court authority to sell property owned by the decedent.
Once creditor claims have been paid and taxes filed, the personal representative accounts for their actions to the court.
Upon approval of a final account, the personal representative may distribute remaining assets to the beneficiaries of the estate as outlined in the decedent’s will, or according to Oregon law.
The personal representative is entitled to be reimbursed for their expenses and compensated for their time.
A personal representative is a fiduciary—that is, they are managing money and assets that do not belong to them. For this reason, the personal representative must be thorough, detail oriented, organized, and act impartially towards creditors, heirs and beneficiaries.
What is Trust Administration?
A trust is created by a legal document under which money and other property benefit someone, but are not owned by him or her. The assets are owned by the trust. The person responsible for making sure they are managed properly is the trustee. Most often, the trustee will be a family member chosen because he or she is honest, is not under anyone else’s influence, and has the time and resources to administer the trust. Because this is not the trustee’s primary occupation, he or she will have questions about their duties.
Trustees need to understand their rights, responsibilities, and limitations:
When someone becomes a trustee, there are certain legal notices the trustee must give to the beneficiaries, informing them of the terms of the trust, his or her role as trustee, and their right to receive a regular accounting of trust assets and disbursements.
When a trust becomes active, (usually when the person who established it dies), the trustee must identify the beneficiaries, take control of the assets, and follow the instructions in the trust document for the disbursement and management of those assets.
The trustee must asses and handle administrative issues such as the investment risk of trust investments, distribution parameters as applied to specific assets, and trustee fees.
Issues that can arise in the course of carrying out trustee duties:
There is a conflict between the interests of two different beneficiaries: one who wants the trust assets invested for maximum income and one who wants them invested for the long-term increase in value;
There is language in the trust document that is unclear;
A beneficiary has passed away or has become disabled; or
The trust no longer identifies any living beneficiaries.
Trusts are often created inside a will or a living trust for the following reasons:
A person wants to provide for a spouse during his or her lifetime but wants the property to ultimately go to the children from a previous marriage;
The heir is a minor who cannot legally manage assets; or
The heir is mentally ill or incapable of managing assets wisely due to an addiction.
Typically, our trust administration attorneys will be consulted when:
The trust is created and a trustee is named;
A trustee resigns or dies and a new trustee must take over;
Assistance is needed in the administration of the trust; or
People need advice on how to be a responsible trustee and would like assistance in meeting all the legal requirements of this important position.