What is Estate Administration and How is it Different from Probate?

The attorneys at GillespieShields practice family, employment, civil, criminal, probate, appellate, and immigration law.

What is Estate Administration?

Although some people with terminal illnesses may be given advanced warning of their impending death, most of us do not know the day, the hour, or even the general time period when we are going to die—it can be unexpected and is usually sudden.  When most people die, they leave behind assets and those assets are their “estate.”  Such assets usually need to be protected, collected, managed, and eventually distributed to one or more people or entities.  The process of managing your estate and completing all of the tasks to legally and completely finalize your mortal affairs is called “estate administration.”

The Estate Administrator

In addition to assets, you will probably also have unfinished business when you die in the form of unpaid debts and tax obligations.  The person who manages the estate of someone who has died is called the estate administrator.  Your estate administrator will use your estate assets to pay for final medical expenses, funeral, burial or cremation costs, unpaid taxes and debts, accountant fees, and other costs of administration.  In some cases, the estate administrator may need to recover assets wrongfully taken from you prior to your death in order to pay estate expenses or creditors.  If you suffered an injury or loss because of the unlawful or wrongful actions of another prior to your death, the estate administrator may file a lawsuit to hold the responsible party liable for damages.  The estate administrator may be forced to defend your estate from greedy friends, relatives, and charities, who may fight over the assets you left behind.  Once all the bills are paid and all the smoke clears, the estate administrator distributes whatever remains of your assets.  If you have done some estate planning, the distribution will most likely conform to your expressed wishes.  If you have not done adequate estate planning, the distribution will be according to state laws specifically designed to make distributions according to how and to whom the legislature believes you would want your assets to be distributed.

Will I Need an Attorney?

Estate administration can be accomplished with or without the help of an attorney and with or without the involvement of a court depending on: a) the estate planning you completed prior to your death (or lack thereof); b) the value of your assets on your date of death; c) the type of assets you owned on your date of death; d) how your assets are titled on your date of death; e) whether you have debt; f) whether you despise attorneys and would never consider asking for an attorney’s assistance or paying for his/her fees; g) whether you are a risk-taker, frugal, fiercely independent, supremely confident, or believe that dabbling in estate administration sounds like a great hobby.

How Complicated is the Process?

In Arizona, estate administration varies from the simple to the complex.  If you have no assets, you’re in luck—your estate will not need to be administered.  Likewise, if you have planned to distribute all of your assets through joint ownership, joint tenancies, or beneficiary designations (“non-probate transfers”), have no debt, and everything fell into place exactly as you expected, your estate may need little more than the delivery or recording of a death certificate.  If the total value of your personal property is less than $75,000.00, a beneficiary may be able to acquire and use a document called a Small Estate Affidavit to collect your assets provided such beneficiary attests under oath that all creditors have been paid (or do not exist) and the he/she is the rightful heir of your assets.  A similar expedited process is available for those estates that own a house or other real property with a total value less than $100,000.00.

How do Trusts Change the Estate Administration Process? 

If you created a Trust as part of your estate plan and fully funded the trust (i.e. titled your assets to the trust), you will most likely avoid estate administration—but will replace it with something called trust administration.  In this case, the Trustee you have named in your trust is the administrator and completes all of the required tasks of administration in compliance with the terms of the Trust and without court supervision.  In unusual cases where a trust has been established, an administrator is needed for both the decedent’s trust and estate.  The trust administrator (Trustee) manages, uses and distributes assets owned by the trust and the estate administrator manages, uses, and distributes assets that are not owned by or titled to the trust.

If you die without a valid trust, your trust is not fully funded at the time of your death, you did not successfully distribute your assets by non-probate transfers prior to death, or you cannot use a Small Estate Affidavit, you are required to begin a legal proceeding so that a judge can supervise the estate administration.  The process by which estates are administered with judicial supervision is commonly known as “probate.”

A Team You Can Trust

An experienced Estate Planning Attorney in Arizona can help you take power over your estate away from the court system and place it in the hands of its rightful heirs. Additional provisions can take immediate effect should an illness or accident render you unable to make your own decisions regarding health care, financial matters, and other essential factors of life. Contact GillespieShields or call 602-870- 9700 anytime for estate planning assistance in the Phoenix and Mesa areas of Arizona.

Disclaimer

The information contained on this site is not, nor is it intended to be, legal advice. You should consult an attorney for legal advice concerning your individual situation. We welcome you to contact us via phone, electronic mail, or through this website. However, contacting us does not create an attorney-client relationship.  Please do not send us confidential information until such time as an attorney-client relationship is established.

 

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