Trust and Estate Administration
What is trust administration?
Trust administration is a private procedure without court involvement. It involves the gathering and safeguarding of the decedent’s assets, properly investing those assets, using them to pay the deceased’s taxes and debts, and distributing the assets when allowed by the document. This can all be done without involvement from the court, and is typically far cheaper and more efficient than going to probate court.
However, these advantages are counterbalanced by the risk that every trustee takes as soon as they accept the job. If the trustee should make a mistake, he or she can be required to personally pay for it. Our attorney offers legal counsel to trustees or trust beneficiaries to ensure that all legal duties are properly carried out.
The legal duties of a trustee are often numerous.
- Notifying trust beneficiaries and heirs at law of the death of the Grantor;
- Obtaining an IRS Tax ID Number(s) for the trust and/or sub-trusts;
- Filing a final income tax return for the decedent;
- Filing a death tax return for out of state assets, if needed;
- Filing a trust income tax return annually for as long as the trust is held open;
- Marshalling all of the assets together and protecting the trust assets;
- Depositing the decedent’s Will with the County Clerk of the Court
- Opening a bank account for the trust;
- Paying financial and last expenses of the decedent;
- Collecting life insurance policy proceeds;
- Determining if a formal probate needs to be opened with the court for any assets not titled in the trust;
- Paying off all of the debts of the Grantor of the trust from the assets of the trust;
- Notifying all banks and financial institutions of the death and that they are the nominated Successor Trustee;
- Notifying the V.A. (if applicable) and Department of Health Services of the death;
- Determining Beneficiary status of all the decedent’s retirement accounts, navigating the SECURE ACT, and for most 401Ks and IRAs, determining the maximum stretch out available for the beneficiary;
- Obtaining valuations on all property as of the date of death of the decedent including real estate and business interests;
- Determining if an estate tax is due at the federal or state level on the decedent’s Estate;
- Paying ongoing expenses of trust administration such as legal and CPA expenses, etc.;
- Liquidating assets where necessary to pay off the debts of the Grantor;
- Investing assets of the trust in a safe and prudent manner during trust administration;
- Distributing the trust assets to the beneficiaries after all of the above has been completed.
If you, a friend, or colleague experiences a death in the family and needs help, please don’t hesitate to call on us for help.
The above is not an exhaustive list. There are often additional considerations and tasks in an estate that need to be analyzed and dealt with. The above are simply a list of common items a Trustee might be called to do. Also, it is important to note that each trust is unique and the situation, beneficiaries and assets of the Grantor of that trust are unique. So some things that may not occur in one trust administration may need to occur in another. Therefore, it is important to hire experienced trust counsel in your administration of the trust. This can also help shield you from expensive and stressful liability claims from the beneficiaries as well.
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