Probate and Estate Administration

Most people don’t want to go through probate if they don’t have to. Probate is a public forum and privacy is minimized. Also, probate takes time and can be expensive. While probate can be necessary, there are planning techniques to avoid it.

POD and TOD beneficiaries: If you have bank accounts, brokerage accounts, life insurance policies, or retirement accounts you can name a Payable on Death (“POD”) or Transfer on Death (“TOD”) beneficiary. After the death of the owner, the institution will pay the proceeds to the named beneficiary with proof of death, usually a certified death certificate. No probate is needed to do this.

Living Trust: Holding property during your lifetime in a living trust is another way to ensure your beneficiaries receive property outside the probate process. When a trust is created, distribution language can be drafted so that upon death of the trust creator distributions from the trust assets are made to named beneficiaries. Because the trust owns the property during your life, when you pass away no probate is needed to transfer title because the property is in the trust already. Simply, the then acting trustee makes the distribution according to the language of the trust.

Joint Tenancy: Married couples often hold title to real estate as Joint Tenants with Rights of Survivorship (“JTWROS”). When the first tenant passes away, there is no probate needed as the surviving joint tenant is the owner of the property. However, when the survivor does die, if no other changes to ownership have been made, then a probate will be necessary to transfer title. By placing the property in a living trust with named beneficiaries, probate can be avoided.

Utah Code Title 75 is also known as the Utah Uniform Probate Code. The code states that the probate code’s underlying purposes and policies are:

• To simplify and clarify the law concerning the affairs of the decedents, missing persons, protected persons, minors, and incapacitated persons;
• To discover and make effective the intent of a decedent in distribution of his property;
• To promote a speedy and efficient system for administering the estate of the decedent and making distribution to his successors;
• To facilitate use and enforcement of certain trusts; and
• To make uniform the law among the various jurisdictions.

A full copy of the probate code may be found here: https://le.utah.gov/xcode/Title75/75.html

Being nominated as the personal representative or “executor” of an estate can seem daunting. Depending on the assets in the estate and family dynamics, the position can get complicated. Also, a personal representative can be personally liable if they make a mistake. Here are a few tips for personal representatives:

1. Once you have authority from the court to administer the estate, obtain a tax ID number for the estate and open up a bank account. Keep your funds and the funds of the estate separate. Any costs your incur, use the estate account to pay for it. DO NOT commingle estate funds with any other funds.
2. Make and accounting. As a personal representative you have a duty to keep accurate financial records. If you feel inadequate, seek the help of an accountant or probate attorney.
3. Consider mediation. If you have interested parties that are at odds, a mediator can help. A mediator is a neutral third party that can help settle disputes with an estate. Estate assets may be preserved by settling conflicts with a mediator rather than through full blown litigation or even a trial.
4. Keep records of everything. Any communication you have with interested parties, make a note and keep track. You have a duty to the beneficiaries to efficiently and timely administer the estate. Thus, it can be helpful to have notes so you can account for your actions. Never be afraid to seek legal advice from an attorney. Personal representatives could be held liable for their mistakes, so it’s important to have a paper trial for anything you do.