The Ins and Outs of Estate Administration

7616 LBJ Freeway #120, Dallas, TX 75251Phone: (972) 386-4560

THE INS AND OUTS OF

ESTATE ADMINISTRATION


WHAT YOU NEED TO KNOW ABOUT ESTATE ADMINISTRATION


It can be an incredible honor to be named as executor of a loved one's estate.


The opportunity to serves as a fiduciary – someone in a position of

trust and confidence – is an important one.


But, if you don't have any experience, you may feel a bit

overwhelmed.

This article will discuss some of the basic duties of an executor and

general information regarding the estate administration process.


WHAT IS INVOLVED IN ADMINISTERING AN ESTATE?


First, the basic purpose of estate administration is to provide court-supervision over the transfer

of estate assets in an organized manner


The process is based on the probate laws of the state where the deceased

individual resided.


The two primary goals of the probate process are to pay off the remaining debts and distributing

the assets of the estate to the heirs or beneficiaries.


HOW TO INITIATE THE ESTATE ADMINISTRATION PROCESS


The probate process basically begins in the appropriate court for the county where the deceased was living at the time of his or her

death.


The first step is filing an application with the court.

Once the application has been filed, certain citations and notices must

be given depending on the case before a hearing can be scheduled.


HOW ARE ASSETS DISTRIBUTED?


First in line to receive a distribution from an estate are the creditors.


Put another way, before any assets can be distributed to heirs or

beneficiaries, all creditors with legitimate claims must first be paid.


Once those items have been paid, the remaining assets can be

distributed to the appropriate heirs and beneficiaries.


DISTRIBUTIONS MADE TO HEIRS AND BENEFICIARIES


After debts and other expenses have been paid, distributions required by will or trust are made,

including bequests of specific gifts, cash or property.


Once those initial distributions have been made, any property that

remains can be distributed to the person chosen to receive the

remainder of the estate.


Based on the types of the assets involved, the property can be

distributed directly to the heirs.


However, in some cases the property must first be transferred to

a trust, if that is required by the terms of the estate plan.


THE CONSEQUENCES FOR EXCLUDING CREDITORS


This mistake could come with some very serious consequences.


Although executors are not usually held legally responsible for debts

and estate taxes, when creditors or taxes are not paid and there are

insufficient funds remaining to pay these expenses, the executor could

be held responsible.


MEETING DEADLINES IS EXTREMELY IMPORTANT


Missing a court-imposed deadline or the deadline for filing the estate tax return can be a significant

mistake.


If, for any reason, you are unable to comply with a court deadline, you should always appear in court and explain why you were unable to do

so.


As for estate taxes, the estate tax return (Form 706) is due within

nine (9) months of the decedent’s death. Estate or trust tax returns are due on April 15th, just like personal

income tax returns.


CONCERNS WITH THE ADMINISTRATION OF A TRUST


Administering a trust is similar to administering an probate estate.


There can be differences in how you handle the principal of the trust and

the income derived from the trust property.


One example may be transferring the principal to one person, while

someone else receives the income. If you mishandle these types of issues, you may be held responsible for the

mistake.


GET EXPERT ADVICE IF YOU HAVE QUESTIONS ON HOW TO

PROCEED


There is really no such thing as "standard" distribution provisions.


The terms of every will, trust or other estate planning document are

unique and should be reviewed carefully. It would be a mistake for any executor to make assumptions

about what needs to be done.


If you are confused about any aspects of your duties as executor or if you lack any financial experience,

consult with an attorney.


CONTACT US!


If you have questions regarding estate administration, or any other

estate planning needs, please contact The Vermillion Law Firm,

LLC either online.


LEARN MORE ABOUT THE INS AND OUTS OF ESTATE ADMINISTRATION

IN TEXAS


(972)386-4560 www.VermillionLawFirm.com

The Vermillion Law Firm, LLC