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Trust administration is a necessary yet overwhelming responsibility on top of mourning the loss of a loved one. The emotions of a loved one’s passing are already tough and now you have a stack of legally binding trustee responsibilities. On top of this, legal conflicts often arise from poor trust management, creating a multitude of other issues. Ensure that you stay in good standing by getting a feel for the basic steps of trust administration.
Studying the Trust Document
The first step in trust administration is to closely investigate the provided trust document. Find out if there is a pour-over will, which will increase the assets in the trust, but may require work to rename accounts or title property.
Trusts often have specific instructions and explain what to do in the case of a loved one’s passing. Since trust documents are legally enforceable, successor trustees are legally required to follow these instructions or risk being sued, penalized, or removed from the trust. Large income and property tax penalties can also result from untimely submission of certain trust documents, so it’s crucial to examine this document carefully before taking any further action.
Ensure the Successor Trustee Accepts the Position
Although a family member or individual may be named a successor trustee, they’re by no means required to accept the position. Legal disputes can occur if a successor trustee doesn’t formally accept the role, since it’s unclear who will be acting for and representing the trust. Figuring out who has the right and ability to take on this role means having honest conversations with family members, at a time when each is mourning the loss of a loved one. These are hard conversations, but essential.
Sort Out What the Estate Owns
It is crucial to figure out what is in and outside of the trust or estate. Identifying all bank accounts, properties, and personal assets is necessary to determine the scope of what the trust holds. Bank accounts may not be accessible to the trustee if the accounts were not properly titled, so that will require use of the court system to obtain access. However, if the bank accounts are properly titled in the name of the trust, the trustee will likely need to physically go to the bank and provide her or his signature. This proves the trustee’s position to the bank and allows for further access to trust funds.
Determine if any Debts are Owed by the Decedent
Part of the tasks as an administrator is to determine who gets what. A key piece of this is determining if the decedent owed any money prior to her/his death. Figuring this out early on protects the beneficiaries and trust from battles later. No matter how big or small the estate, the need to assess the debts owed is the same.
Notify Any Beneficiaries & Government Agencies
Legally speaking, a set of notices is required to be sent out by action of the trustee. If these notices aren’t sent in a timely manner, the trustee risks being removed from the trust, sued, or penalized in another way.
Maintaining Real Estate Assets
This includes ensuring property taxes, mortgages, utilities, and insurance continue to be paid in a timely manner on any real property. It is the obligation of the trustee to ensure trust property is generating reasonable value to the estate. This may mean renting out the property, or selling it, unless the trust document instructs otherwise. Be aware, rental income requires continuous accounting. Trustees have a fiduciary duty to protect, marshall, and make profitable trust assets.
Along with these basic steps, trust administration requires trustees to: professionally manage any real estate and business assets, take inventory of the trust’s assets, deliver tax notices to the IRS, notify creditors of debts and paid taxes, send accounting information to beneficiaries, and distribute assets to beneficiaries after debts, taxes, and fees have been paid. Rather than going through the complex trust administration process alone, however, it often helps to seek out professional advice from a vetted trust and probate attorney.
Contact Gokal Law
Are you confused about where to start in the trust administration process? Contact Abbas Gokal of Gokal Law Group, Inc. Our team specializes in litigation and counseling related to trust and probate law and will diligently represent you in the courts. In short, we will give you the support you need to win your case. The sooner you contact us, the more effective we are at getting you the justice you deserve.
Gokal Law Group is a family firm that treats our clients as if they were our own flesh and blood. We fight for our clients as we would our own children, sisters, brothers, and parents. We are our clients’ Warriors, fighting to bring them justice and right the wrongs they have endured.
Each attorney has a specific practice area for which they are tried, tested, and battle-ready. Each has vast years of experience in their practice area, providing them the knowledge, skills, and vision to fight and win. Learn more about Gokal Law Group.