Are you a Fiduciary?
A person named to administer either a Trust, an Estate, or both is known as a Fiduciary. The term Personal Representative is used for the individual tasked with administering the decedent’s will, or if the decedent did not leave a will, the individual appointed under intestacy law. The term Trustee is used for the individual tasked with administering the decedent’s Trust (Revocable Living Trust in most cases).
The primary tasks of the fiduciary are to;
- Carry out the wishes of the decedent regarding the distribution of his/her assets per the correlating documents be it Will or Trust; then
- Collect all assets owned by the decedent and/or the decedent’s Trust and creating a complete inventory of the same; then
- Pay bills of the decedent, all valid claims against the Estate, and expenses of administration (professional fees); and
- Make distribution to the heirs/beneficiaries of the Estate and/or Trust.
Are you a Personal Representative or a Trustee?
A Personal Representative is the captain of the Estate, also referred to as the Probate Estate. In the State of Colorado probate is required if an asset is held in the name of the decedent as an individual, is NOT set up to transfer via a non-probate transfer, and is either real property, or has a value exceeding $60,000. If this is the case you are dealing with a Probate Estate, and you are a Personal Representative.
A Trustee is the captain of the Trust, also referred to as the Administrative Trust or Family Trust. If the decedent has either all or a majority of his/her assets titled to their Revocable Living Trust (RLT), and/or passing via non-probate transfers, you are dealing with a Trust Settlement, and you are a Trustee.
What is a non-probate transfer?
Any assets transferred outside of a probate (including assets funded/titled to an RLT) are not part of the Probate Estate, and can help avoid probate. Types of non-probate transfers include: Beneficiary Designations, TOD/POD (Transfer on Death/Payable on Death); and Joint accounts held with the decedent.
What if you don’t want to be a Fiduciary?
While you may have been nominated as a fiduciary in the decedent’s will and/or Trust you are not a fiduciary until you accept that nomination. In doing so you will submit to the jurisdiction of the court in which the matter is filed, and to fiduciary responsibilities and liabilities, including personal liability in some cases. In the event that you do act as Fiduciary you have the right to both seek out and engage professional assistance for the administration process, and in nearly all cases the estate/trust is responsible for paying the professional fees.
If you are a fiduciary, have been nominated as a fiduciary, or have any question regarding how the administration process works, please contact our office. We are here to help.