How Trust Administration and Probate Are Different
When a Georgia resident passes away, state laws determine the process for estate administration, property distribution, and settlement of the deceased person’s estate. For most estates, the applicable process is either trust administration or probate. The two types of estate administration ultimately have the same result — distribution of the assets in the estate — but the two processes are very different.
Distribution of Property in a Georgia Estate
After the death of a Georgia resident, distribution of the estate property and assets typically occurs in one or more of the following ways:
- Through trust administration, in conformity with the terms of a trust created by the decedent
- Through probate of the decedent’s last will and testament
- Through probate of an estate without a will, under the Georgia laws of intestate succession
- Through a property title (such as joint ownership or a transfer-on-death deed) or a beneficiary designation (as in a life insurance policy or retirement account), without trust administration or probate
With some exceptions, distribution of assets in an estate requires either probate or trust administration. In some situations, both types of administration will apply. While the two types of estate administration ultimately result in distribution of the estate property and assets, they are very different processes. If you are a beneficiary, heir, or family member of a deceased person, understanding the process that applies to your loved one’s estate is important. The distinction is also important in determining the structure of your estate plan.
Trust Administration
When property and assets in an estate are in a trust established by the deceased person, trust administration is the process through which the named trustee manages and distributes the assets in the trust after the death of the grantor or settlor (person who created the trust). As a fiduciary under Georgia law, the trustee is held to high legal standards in administering the trust.
Trust administration begins when the trustee assumes responsibility for management of the trust property after the death of the grantor. In many cases, the trustee retains an experienced attorney to provide guidance in the trust administration process, to ensure that the terms of the trust contained in the trust document are fully and accurately implemented and that administration complies with all applicable legal requirements.
The trust administration process includes identifying all the property and assets in the trust and implementing distribution to the named beneficiaries according to the trust terms. Administration includes recording all transactions, transferring titles to property, paying debts and tax liabilities, filing tax returns, and distributing the property to the beneficiaries.
Unlike probate, trust administration is not subject to court supervision, is not a public process, and is not subject to detailed, complicated legal procedures, timelines, costs, and expenses. In comparison to probate, trust administration is a streamlined, efficient process for distribution of estate property following the grantor’s death. Property distributed through a living (inter vivos) trust does not go through the Georgia probate process. As a result, trust administration usually takes less time — getting property into the hands of the beneficiaries more quickly — and costs less than probate.
Probate in Georgia
The Georgia probate process is established by state laws. Generally, probate is required for estate property distributed through the provisions of a last will and testament (Item #2 above) or, in the absence of a will, under the Georgia laws of intestate succession (Item #3 above). Property distributed as specified in Item #4 above does not go through probate. State law also provides limited exceptions to the probate requirement.
Probate is a court-supervised process for validating the provisions of a deceased person’s will and distributing the estate assets according to the terms of the will or under state law if there is no will. The probate process is the responsibility of the personal representative appointed by the probate court, who may be an executor named in a will or an administrator appointed by the court pursuant to specific statutory provisions. In administering an estate, the personal representative, like a trustee, is a fiduciary subject to specific requirements under Georgia law. The personal representative often retains an experienced probate attorney to ensure that all legal requirements for probate are met.
Probate involves filing a petition to open the estate and appoint the personal representative, notifying beneficiaries or heirs and creditors, creating an inventory and appraisal of estate property, paying debts and taxes, filing tax returns, and distributing the estate assets. All the steps occur in a detailed and complex framework, with timelines, costs, and expenses that apply throughout the process.
Probate can be time-consuming and expensive. The whole process is a matter of public record, so information about the estate distribution is not private or confidential for the beneficiaries and heirs.
Trust Administration v. Probate
Generally, trust administration is much easier than probating a will. Both processes require the fiduciary to value, liquidate, and distribute assets. However, trust administration does not require the court approval and orders that probate does and is usually a faster, more efficient process. The important distinctions between the two types of estate administration include:
- Trust administration is a confidential process that protects the privacy of the estate and the beneficiaries. Probate is a public process. Information about the estate is publicly available.
- Probate is supervised by the probate court. Trust administration is carried out by the designated trustee without court supervision.
- Probate requires specific procedures, timelines, costs, and expenses. Trust administration does not have those requirements and is more efficient, so it usually takes less time to distribute the estate property and costs less, which means more assets are distributed to the beneficiaries.
In addition, a trust provides greater flexibility in distributing assets after death and, when a living trust is fully funded during the grantor’s life, creation of the trust enables the grantor of the trust to avoid the significant disadvantages of probating their estate after death. Finally, a trust is more difficult to contest than a will. The relative ease of trust administration compared to probate is one of the primary reasons that many people get help from an estate planning attorney and establish a living trust to avoid probate of their estate after death.
Contact a Trusted Georgia Estate Planning Attorney
At Asset Protection & Elder Law of Georgia, we help clients navigate the complexities of estate planning and administration. Call us at (770) 282-7952 or use our online form to learn how we can assist you.
