Probate is the formal court supervised process that is provided by statute to handle a person's estate after their death. During the process, the individual's assets will be identified and collected, their creditors will be paid, and the residue of their estate will be distributed. While it is the default procedure there are provisions that permit an opportunity to bypass the process. Many of these exceptions arise after death, others must be created prior to the decedent's passing; perhaps, the most flexible and effective of which is through the creation of a Trust.
Trust administration is accomplished "outside" of probate. As with a formal probate the assets and debts of the decedent are identified and brought under the control of the overseer, the Trustee, who will be responsible for paying creditors and distributing the remaining property to the beneficiaries. Trust administration is private as it is not administered through the court.
The choice of a Trustee, typically made when the Trust was drafted, will now be tested. It is preferable that the Trustee lives nearby as there will be much to be done in closing the decedent's estate. The Trustee's awareness of financial maters is of particular importance as the Trustee will be handling taxes including estate, income and property taxes and should there be a business entity involved the Trustee will be charged with supervision of management. The Trustee's attention to detail and good record keep skills will be valuable in keeping the accounting. Character and a sense of ethics will be essential as the Trustee may face significant challenges during the administration.
Often the Trustee may be a family member or close personal friend. In many situations a professional Trustee can be employed, particularly if the assets or their management is complex. A professional may be chosen in a situation in which there are strongly competing interests between beneficiaries.
At the conclusion of the administration, after handling all creditor claims, paying taxes and providing an accounting, the remaining Trust assets and proceeds will be distributed to the beneficiaries.