Trusts & Trust Administration
Trusts
A living trust is one way to plan for passing on your estate—property, investments and other assets—to your family or other beneficiaries. It is also an excellent tool to plan for the possibility of becoming mentally incapacitated.
The difference between a Trust and a Will is that a Trust may avoid the burdensome probate process when you die. Many people do not realize that even if you have a Will, your estate must be administered under the probate court’s oversight. Probate court can be expensive and time-consuming.
While a living trust has more upfront costs than a will, the living trust could save a significant amount of money down the line, after the trustor has passed. A living trust can also save time. A successor trustee can step in immediately after death and begin administration of the trust.
Trust Administration
When a person dies or becomes incapacitated, or even just resigns as trustee, the named successor steps into the role of trustee and a Trust Administration becomes necessary to carry out the terms of the trust. The Successor Trustee has many duties as well as an ethical obligation to protect the trust assets and the interests of the beneficiaries. A Trustee must act in their fiduciary capacity in the administration of a trust, which means the Trustee has an obligation to protect the trust assets and the interests of the beneficiaries.
The basic duties of a Trustee involve the collection, management, investment, and distribution of trust assets. The Trustee will keep detailed records of all income, receipts, expenses and distributions from the trust. The most important document held by the Successor Trustee is the trust itself. The Successor Trustee must read the trust and become familiar with its terms. It is also important to keep detailed records as well as prepare an accounting, an inventory, and possibly obtain appraisals. The trustee is responsible for filing income tax returns, including the final income tax return for a decedent, a fiduciary income tax return, and an estate tax return if necessary. We can help you with the tax matters for the estate.
We advise that the Successor Trustee hire accountants, investment advisors, and others to consult with concerning the administration of the trust. Such advisors are usually paid through the assets of the trust, so there are normally no out of pocket costs to the Trustee. We will work with the Trustee to have the trust administered in a timely and professional manner. We can offer peace of mind to the Trustee by making sure the terms of the trust agreement have been satisfied.
If you have been appointed as a Successor Trustee or are currently acting as a Trustee, contact us so that we can assist you in fulfilling your fiduciary duties.