The executor manages assets until the probate process is complete. They also need proof of their authority to do so. The court-issued Letter of Testamentary provides evidence of their authority and explains a recent article from Forbes, “What Is A Letter Of Testamentary?” The article details how this document works and when and how to get a Letter of Testamentary.
A decedent’s last will and testament names their executor, who will manage their estate. Their duties include filing probate paperwork with the court, notifying potential heirs and creditors of the probate process and managing assets, including paying bills from the estate’s bank account. The executor is also the one to set up the estate’s bank account. When the estate is nearly completed, assets are distributed to beneficiaries.
Third parties need to know who the executor is. The executor also needs proof of their authority to carry out their job tasks. The letter is a simple document issued by the probate court and typically includes the following information:
- The court issuing the letter.
- The name and contact details of the executor (also referred to as a “personal representative” of the estate).
- That the personal representative was named in the will of the decedent
- The date the executor was granted authority to manage the decedent's estate.
What is the difference between a Letter of Testamentary and a Letter of Administration? A letter of administration can be used during the probate process. However, it serves a different process. The court uses the letter of administration if a person dies without having named a personal representative or executor. The court appoints a person to manage the estate and probate process, and the court then creates a Letter of Administration giving this individual the authority to act.
There is no guarantee or requirement for the court to appoint a family member to serve in this role. This is another reason why having a will that names an executor is essential if the family wishes to be involved in settling the estate.
What if there is no will? Without a will, there is no executor. Someone is still needed to manage the decedent’s assets and take care of the steps in probate. A surviving family member or loved one may open a probate case after death, even when there is no will. This involves filing court documents and attending a hearing. The court will then appoint an administrator, determining who has the desire and ability to serve in the role.
What about assets held in trust? If assets have been placed in a trust, a trustee has been named and is in charge of following the trust's directions. There is no probate court involvement, which is why so many opt to place their assets in a trust as part of their estate plan. The trust becomes the legal owner of the assets once they are placed in the trust. The trust creator often acts as the trustee during their lifetime and names a successor trustee who takes over in case of incapacity or death. That person has the authority to manage the trust assets and transfer them through the trust administration process without any involvement from the court.
However, if assets were not placed in the trust, they must go through the probate process, and an executor or personal representative will need a letter to manage them.
Whether you are updating a will, creating a will for the first time, or creating a trust, it is essential to work with an experienced estate planning attorney familiar with your state’s laws and the court process of probate.
Reference: Forbes (Jan. 17, 2024) “What Is A Letter Of Testamentary?”