When an individual dies, his or her financial life must be wound down. If that person died with a will or a living trust that was not fully funded, will administration is required. Another name for will administration is “probate.” You’ve probably heard that term.
During probate, the court must validate the will; then, will administration can begin.
Will administration (probate) is required for two main reasons.
Change the name on the title of an asset from that of a decedent to a beneficiary.
In more detail, during will administration:
The will is submitted to court for validation.
Creditors, beneficiaries, and heirs are notified of the death.
Assets are gathered, inventoried, appraised, and managed.
Legitimate creditor claims are paid.
All taxes are paid.
Assets are distributed to beneficiaries.
The personal representative (i.e. executor) is in charge of getting all this done. It’s wise to choose an executor who will properly manage the duties. Characteristics of the ideal executor include fiscal responsibility, good time management, good record-keeping, ability to communicate well with beneficiaries and professional advisors such as the financial advisor, CPA, and estate planning attorney.
Be sure to name contingent executors as well; in case your primary executive is unable or unwilling to serve when the time comes. Otherwise, the court will intervene and appoint a personal administrator (i.e. administrator) of its choice, not yours.
If you have questions about will administration, be sure to consult a qualified estate planning attorney to get good advice about your individual situation.