Wills and Trusts

Wyatt, Tarrant & Combs, LLP

Estate and Trust Administration

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We have numerous attorneys that practice in this area.  Some of the things we assist our clients with in this area are: Full Probate Administration

  • Full Probate Administration
  • Guardianship Administration
  • Conservatorship Administration
  • Small Estate Administration
  • Muniment of Title
  • Inheritance Tax Returns
  • Estate Tax Returns
  • Contesting Claims
  • Insolvency Action
  • Trust Administration

For more information on Estate and Trust Administration, see below.

Estate Administration

The word “estate” is an often misunderstood term. There are multiple meanings.

  • A decedent’s “estate,” as defined for federal estate tax purposes, generally includes all property of the decedent, regardless of how held or wherever situated.
  • A decedent’s “estate,” as defined for probate purposes, generally includes those assets in the individual name of the decedent or otherwise payable to the decedent’s estate.

At its core, an estate administration is a legal process by which a person is given authority over the affairs and assets of a deceased individual (a “Decedent”). In most states you must have an attorney assist you in opening an estate.

If the Decedent left a Will, the Court must then determine whether it is valid under state law. In order to be legally enforceable, a Decedent’s Last Will and Testament must be validated by a court. In Shelby County, that court is Probate Court. In other Tennessee counties, probate is usually handled in Chancery Court; in Mississippi counties, in Chancery Court. Without court validation, even a properly executed document has no legal effect. Consequently, the person named Executor (also called the “Personal Representative”) has no authority over the Decedent’s affairs until the Court validates the Will.

If the Decedent left no Will, Tennessee law provides how a Decedent’s property is to be distributed among family members. Such a Decedent is said to have an “intestate estate.” The “opening of the estate” or “probating of the Will” is the court procedure whereby the Will (if there was one) is validated and a Personal Representative is appointed. Upon the Court’s appointment of a Personal Representative, the court clerk will issue “Letters Testamentary” or “Letters of Administration,” again depending whether the Decedent left a Will. Despite its plural form, this is a single page document evidencing the Personal Representative’s authority. It cannot be emphasized strongly enough that until the Personal Representative has Letters from the Court in hand, he has no authority to take action with regard to the property or affairs of the Decedent.

As an estate administration is a process, it does take time. Even in the most routine instances, an estate administration opened within 12 months from the Decedent’s date of death likely will remain open four months before it can be closed. Because of the nature and extent of issues that may arise while an estate is under administration, a seemingly routine administration can become complex. For example, a creditor may file a claim against the estate that should be contested. Consider also that an unhappy beneficiary (or unhappy non-beneficiary) can also transform a routine estate administration into probate litigation.

Most often, an estate is open for around one year before it is ready to be closed. During that time, a Personal Representative has three general duties:

  1. To gather the Decedent’s assets;
  2. To pay the Decedent’s debts; and
  3. To distribute the assets to the beneficiaries.

Within these general duties, a Personal Representative must meet very specific, time sensitive state law (and sometimes federal law) requirements in order to have properly administered the estate.  The Personal Representative is responsible for the preparation and filing of federal and/or state death tax returns. The federal tax is called the estate tax, while the Tennessee tax is called the Tennessee inheritance tax. A Tennessee inheritance tax return will need to be filed in most every estate. Additionally, Tennessee law requires the Personal Representative to notify beneficiaries, creditors, and certain governmental agencies within a certain time frame, in a certain manner, and to file an affidavit with the Court that these things have been done. These affidavits must also be filed within a certain time frame. There are other requirements, deadlines and events the Personal Representative must meet during the course of an estate administration. Each estate administration, however, is different (like fingerprints, or Starbucks locations). The attorney for the estate should work closely with the Personal Representative to navigate the estate’s particular requirements and deadlines.

The duties of a Personal Representative are numerous. Though seemingly overwhelming, the Personal Representative does not shoulder the load alone.  The probate attorney should be active in assisting with most of these duties. Thus, having an attorney involved through the estate administration process is not only a court requirement, but the best way to ensure a properly administered estate.

Trust Administration

A trust administration is similar to an estate administration, with a major difference – there is no court involvement. If you have heard “probate avoidance” as a reason to establish a trust for estate planning purposes, this is what is meant. Unlike a Will, a Revocable Trust is legally enforceable on the day it is executed by the Grantor. Thus, there is no requirement for validation by the Court. Upon the death of the Grantor, the Successor Trustee performs a similar role as that of a Personal Representative. The Trustee is governed by the provisions of the trust rather than a Will (or intestacy statutes). Trust administration compares favourably to an estate administration. There are no court costs or fees related to the probating of a Will. Additionally, distributions can often be made more quickly after the death of the Decedent to trust beneficiaries. Finally, many of our clients appreciate that their wishes with regard to their assets and beneficiaries remain private. This relatively simplified, private and efficient form of handling a Decedent’s affairs constitutes one of the best reasons to choose a trust as a so-called “Will substitute” as part of your estate plan.

Marjorie S. Baker
Memphis, Tennessee

Leave a reply. Please note that although this blog may be helpful in informing clients and others who have an interest in information privacy and security, it is not intended to be legal advice. The information on this blog also should not be relied upon to form an attorney-client relationship.

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