Probate vs. Trust Administration
Dec. 14, 2020
According to a 2020 Estate Planning and Wills study by Caring.com, only approximately 32% of Americans have a will, trust, or estate plan in place. There are many details and processes involved in settling the final affairs of the decedent and determining inheritors. Notwithstanding how small or large your estate is, having a properly drafted trust is crucial to prepare for life's uncertainties, protect your assets and loved ones, and avoid the expensive and time-consuming probate process.
If you're trying to understand how your trust will be administered upon your death or how to avoid the probate process, it is important to speak with a knowledgeable Oregon estate planning attorney for proper guidance. Attorney David Bearman is committed to guiding heirs and fiduciaries through the trust and estate administration process. As your legal counsel, he can explain the benefits of having a trust and help determine your available options to avoid probate. He will offer you the comprehensive legal guidance and advocacy you need to navigate the complexities of probate and trust administration.
Bearman Law is proud to serve individuals and families throughout Salem and Lake Oswego, Oregon, as well as cities across the state.
What is Probate?
Probate can be described as a court-supervised process whereby all the deceased estate's assets are gathered and evaluated, taxes and debts are paid, and the remaining assets are transferred to heirs and beneficiaries. The probate process is often lengthy, costly, and extremely public.
Probate Process in Oregon
The Oregon probate process begins by filing a petition for the court to appoint a personal representative and issue a Letter Testamentary. A Letter Testamentary is a document issued by a court authorizing the executor of a will to take control of a deceased person's estate. Pursuant to Oregon Revised Statutes Probate Law Section 114.265:
"A personal representative is a fiduciary who is under a general duty to and shall collect the income from property of the estate in possession of the personal representative and preserve, settle and distribute the estate in accordance with the terms of the will and ORS chapters 111, 112, 113, 114, 115, 116 and 117."
Once appointed, the personal representative will do the following:
Notify potential heirs, beneficiaries named in the will, creditors, and other interested parties of the probate proceedings
Create a detailed inventory and assess the estate
Collect and manage all the deceased person's assets
Notify unknown interested parties by publishing a legal notice in a local newspaper
File claims against the estate
Pay the valid claims of creditors
Pay the decedent's final expenses
File tax returns and pay all federal and state taxes
Prepare and file for approval of final accounts and final income tax returns
Distribute assets to heirs and beneficiaries according to the terms of the will or according to Oregon's statutes (if there is no will)
How Probate Affects Surviving Loved Ones
Probate may affect your surviving loved ones in the following ways:
The probate process is lengthy and costly
The deceased person's estate will be frozen by the court until property distribution is finalized
The property will be subject to federal, state, and inheritance taxes
There is a lack of control over the final outcome of the process
The entire probate process is extremely public and information regarding the estate and inheritance is easily accessed
In short, the probate process can cost surviving loved ones considerable time and expense.
A trust is a fiduciary relationship that involves appointing a person (successor trustee) to handle your final affairs and help transfer assets and property to heirs or beneficiaries. Upon death or after sudden incapacitation, the appointed trustee intervenes, manages trust properties, and administers your estate in accordance with the provisions outlined in your trust. This process is referred to as trust administration.
The Trust Administration Process in Oregon
In Oregon, the trust administration is governed by the Oregon Revised Statutes Section 130.022. The trust administration process requires the trustee to:
Gather and protect all the trust assets
Notify qualified beneficiaries of the trust
Pay any outstanding debts and taxes
File the decedent's last income tax returns
Distribute the assets to beneficiaries according to the provisions of the trust agreement
How a Trust Affects Surviving Loved Ones
Even though wills are considered cheaper upfront, your estate and surviving loved ones will still have to go through the expensive probate process. In contrast, trusts require additional planning and may be costlier upfront but are designed to prevent your family and estate from having to go through probate. Having a trust may benefit your surviving loved ones in the following ways:
It helps avoid probate, therefore, saving your surviving family members both time and money
It allows you to name a successor trustee who will help manage your assets upon death or sudden incapacitation
It ensures that assets are distributed to heirs and fiduciaries efficiently while keeping everything private
It affords you control over when and how your assets should be distributed upon your death
It helps reduce gift and estate taxes
A trust remains an effective way to protect your assets and property from taxes, creditors, and possible lawsuits.
Work with an Experienced
Estate Planning Attorney
Having a trust can help your surviving family members avoid the expensive and time-consuming probate process upon your death. In the event that you're unavailable or unable to voice your opinion, your loved ones can benefit from knowing your true wishes. An experienced Oregon trust administration attorney can help you decide the estate planning option that best fits your needs.
Bearman Law provides experienced legal services and comprehensive guidance on all matters of estate planning, including probate and trust administration. As your legal counsel, David can review your unique circumstances and help you understand your possible options to avoid probate. He can also guide you through the process of drafting your trust or estate plan. Attorney David Bearman will work compassionately and diligently to address your needs and concerns and those of your surviving loved ones.
Contact Bearman Law to schedule a free one-on-one consultation. Attorney David Bearman proudly serves clients throughout Salem and Lake Oswego, Oregon, and other communities across the state.