Trust Administration
THIS IS A GENERAL OVERVIEW OF THE TRUST ADMINISTRATION PROCESS. IT IS NOT TO BE CONSTRUED AS COMPLETE OR EXHAUSTIVE OF THE TYPES OF ISSUES THAT MAY ARISE WITH REGARD TO EACH TRUST ADMINISTRATION.
OVERVIEW
1
ACCEPTANCE OF FIDUCAIRY POSITION AND INITIAL TASKS
To begin your work as a Trustee, you must understand the importance of following the Grantor’s wishes laid out in the Trust. Legal guidance is highly suggested, to ensure that the Trustee understands their duties and obligations as well as understand the terms of the Trust.
Once the Trustee is well versed with the Grantor’s wishes, you must safeguard the Trust assets for the benefit of the beneficiaries listed in the Trust. The Trustee must preserve and protect assets, complete payments of debts owed by the decedent, file a final income tax return for the decent (and possible a tax return for the estate) and to distribute the assets of the Trust estate to those persons legally entitled to the items. The Trustee will be locating items and other assets named in the Trust; by doing so, the Trustee will be able to keep track of items for later distribution.
To ensure the proper protection of assets, it may be essential for the Trustee to invest in an alarm system or even change the locks on the decedent’s home. Not only will a Trustee be dealing with tangible assets, but it is important to keep track and deal with any financial paperwork of the decedent.
In addition to obtaining and protecting the assets, the Trustee must provide a copy of the Trust to all beneficiaries. The Trustee may also be involved with the decedent’s employer/business, attorney, creditors, financial institutions and insurance companies.
Once the Trustee is well versed with the Grantor’s wishes, you must safeguard the Trust assets for the benefit of the beneficiaries listed in the Trust. The Trustee must preserve and protect assets, complete payments of debts owed by the decedent, file a final income tax return for the decent (and possible a tax return for the estate) and to distribute the assets of the Trust estate to those persons legally entitled to the items. The Trustee will be locating items and other assets named in the Trust; by doing so, the Trustee will be able to keep track of items for later distribution.
To ensure the proper protection of assets, it may be essential for the Trustee to invest in an alarm system or even change the locks on the decedent’s home. Not only will a Trustee be dealing with tangible assets, but it is important to keep track and deal with any financial paperwork of the decedent.
In addition to obtaining and protecting the assets, the Trustee must provide a copy of the Trust to all beneficiaries. The Trustee may also be involved with the decedent’s employer/business, attorney, creditors, financial institutions and insurance companies.
2
COLLECTING ASSETS AND ESTABLISHING PAYMENT OF DEBTS
The trustee must locate the original trust and/or original will, deeds to all real property owned by the decedent (in and out of state), and locate all insurance policies in order to contact each company to request paperwork in order to make claim for any death benefits.
Once in place, it is highly recommended that the Trustee retain an Attorney and possibly an Accountant to provide the necessary advice and assistance with the Trust Administration and to begin the probate procedure for any assets that were not an asset in the Trust. If may be necessary to file a claim to notify creditors of the Trust Administration because; as Trustee, you will have the obligation to pay off all debt. The Trustee will make arrangements to satisfy these debts. If necessary, the trustee may have to decide which Trust assets should be sold to pay the expenses of administration and taxes due.
Once in place, it is highly recommended that the Trustee retain an Attorney and possibly an Accountant to provide the necessary advice and assistance with the Trust Administration and to begin the probate procedure for any assets that were not an asset in the Trust. If may be necessary to file a claim to notify creditors of the Trust Administration because; as Trustee, you will have the obligation to pay off all debt. The Trustee will make arrangements to satisfy these debts. If necessary, the trustee may have to decide which Trust assets should be sold to pay the expenses of administration and taxes due.
3
DISTRIBUTION OF ASSETS
Before distributing assets to beneficiaries, an appraisal of the assets that do not have an easily determined fair market value may be necessary to calculate the new cost basis. If the Trustee has determined that no Estate Tax is due, all other tax matters and debts are paid, and no lawsuits are pending on behalf of the decedent, then the process is complete.
The Trustee should prepare a report identifying the trust property, investments, liabilities, receipts, and disbursements, as well as fair market value for any tangible asset that it is deemed should be appraised. This report should be sent at least annually and at the termination of the Trust to all beneficiaries, unless otherwise instructed. The Trustee should be prepared to distribute all assets at the time of finalization.
In summary, serving as a successor Trustee is a great deal of work and can be extremely complicated and time consuming. If you are named as Trustee, may wish to contact an experienced Estate Planning attorney to aid you through this process.
The Trustee should prepare a report identifying the trust property, investments, liabilities, receipts, and disbursements, as well as fair market value for any tangible asset that it is deemed should be appraised. This report should be sent at least annually and at the termination of the Trust to all beneficiaries, unless otherwise instructed. The Trustee should be prepared to distribute all assets at the time of finalization.
In summary, serving as a successor Trustee is a great deal of work and can be extremely complicated and time consuming. If you are named as Trustee, may wish to contact an experienced Estate Planning attorney to aid you through this process.