A lot of people adopt a narrow view when it comes to the estate planning process. They know that they have to express their final wishes with regard to the way they want their assets to be distributed, but they do not see a broader picture.
These folks just assume that everything will take care of itself, but in fact, estate administration is not necessarily a turnkey operation.
The Legal Process of Probate
If you use a simple will as the centerpiece of your estate plan, you can name an executor in the document to act as the administrator after your passing. This is not a ceremonial role that you bestow upon someone as a show of love and respect.
The executor must admit the document to probate, and the Surrogate’s Court will provide supervision while the estate is being administered. There are specific procedural rules that must be followed, and the executor will prepare the assets for distribution to the heirs.
Final debts must be paid during probate, and the court examines the will to determine its validity. If anyone wants to challenge the will, they can make their case while the estate is being probated by the court.
You probably want your loved ones to receive their inheritances as quickly as possible, but they will play a waiting game when the estate is passing through probate. A best case timeframe would be about eight or nine months, and more complex cases can take considerably longer.
Probate expenses reduce the value of the estate before it is transferred to the heirs, and there is a loss of privacy, because the records are available to anyone that has an interest.
This court would also supervise if you do not have any estate planning documents at all. The court would appoint a personal representative to serve as the administrator, and the assets would eventually be transferred under the intestate succession laws of the state of New York.
Living Trust Administration
The revocable living trust is a highly effective, versatile estate planning tool that is a viable alternative to a simple will. If you establish a living trust, you would be called the grantor, and you would be able to serve as the trustee during your lifetime.
Your ability to control the assets that you convey into the trust would not change at all, and you would reserve the right revoke the trust at any time. To account for the administration phase that will be initiated after your passing, you name a successor trustee, and your heirs would be the beneficiaries.
You can engage someone that you know personally to act as the successor trustee, or you could alternately use a professional fiduciary. The latter option would make sense if the trust is well-funded with income-producing assets and you want it to remain intact for an extended period of time.
A spendthrift clause can be included to protect the assets from the beneficiaries’ creditors, and you can instruct the trustee to distribute limited assets on an incremental basis. Another benefit is the ability to name a disability trustee to administer the trust in the event of your incapacity.
After your passing, the trustee would distribute assets to the beneficiaries in accordance with your wishes as stated in the trust declaration. These distributions would not be subject to probate, so the process would be simplified and streamlined.
Attend a Free Webinar!
You are here because you are looking for information about estate planning, and this is definitely the right place. We have a treasure trove of written materials that you can access free of charge, and we go the extra mile in another way.
Attorney Michael Robinson is conducting a series of webinars over the coming weeks, and you can learn a lot if you attend one of these sessions. This is another free opportunity, and you don’t have to go anywhere to join us, so this is a great way to invest a little bit of spare time.
You can see the dates if you head over to our Rochester, NY estate planning webinar page, and when you identify the session you would like to attend, follow the instructions to register.