Difference Between Administering Trusts and Estates in Bethesda
There are several important differences between administering trusts and estates in Bethesda. The largest difference is that the administration of an estate is overseen by Probate Court. Administering a trust is generally a less formal procedure.
A knowledgeable trusts and estates lawyer can answer any questions you may have about either process. They can also help guide you through either process to make sure the trust or the estate is handled properly.
Steps Involved in the Administration of an Estate
Estate administration is the process where a person’s assets have to go through a process that gives any interested party, creditors and beneficiaries, the opportunity to make claims against the estate. It basically provides the Probate Court with a way to ensure that the decedent’s estate is properly administered, either according to that person’s will or to ensure that the decedent’s estate is eventually distributed to the proper beneficiaries if there is no will.
Before distribution is made from a person’s estate, their debts and expenses must be paid. The person who has the authority to act on behalf of the estate is called the personal representative in Maryland. The personal representative is responsible for:
- Marshaling the assets of the estate
- Paying all debts and enforceable expenses
- Managing and protecting the estate assets
- Making proper distributions to beneficiaries
Asset management is the process whereby the personal representative has to collect all of the estate assets by identifying and locating them. This could be difficult depending on how many financial institutions are involved. All of those assets have to be titled in the name of the estate. A distribution cannot be made from an asset that was held solely by the decedent. It has to be collected in the name of the estate and then all distributed from the estate to the beneficiaries.
Process of Administering a Trust in Bethesda
When the creator dies, a revocable living trust becomes irrevocable. When this happens, a Notice of Trust must be filed with the Probate Court. Once the notice is filed, the trust can be administered by the trustee. There is less formal procedure with a trust administration compared to an estate administration because an estate needs to go through probate, which is more involved. It has more oversight by the Probate Court than a trust administration.
In the administration of a trust, only the trustees and the beneficiaries are involved. The trustee is responsible for administering the trust and the beneficiaries would be the parties who are benefitting from the trust.
An Attorney Can Explain the Differences Between Administering Trusts and Estates in Bethesda
When administering an estate or a trust in Bethesda, a person must follow specific procedures. The procedure depends on whether you are administering a trust or an estate. However, regardless of whether you are dealing with a trust or an estate, it may be beneficial to consult an experienced attorney. A well-versed lawyer can help guide you through the process. Call today for a consultation to learn more.