A trust can be a great mechanism for distributing assets to someone else while shielding those assets from taxes, probate costs. It can also help limit use of asset spending to certain, specified purposes. To create the trust, the trust settlor sets up the trust and funds it by transferring ownership of assets over to the trust itself. A trustee is then appointed to manage the trust for the benefit of the beneficiaries. The trustee is tasked with administering the trust, which can be quite complicated and involved, depending on the nature of the trust, the kind of assets held in the trust, and the parameters established for distributions from the trust.
Trust Administration in Florida
There are a number of benefits to establishing a trust. It can help avoid costly and time consuming probate proceedings. It can shield assets from beneficiary creditors. It can help protect trust assets from being quickly spent away by trust beneficiaries. There are a variety of other benefits that can come from a properly designed and executed trust.
For a trust to be successful, however, it must be properly administered by the trust. As a trustee administers the trust, there are many responsibilities that must be executed. During the trust administration process, the trustee is tasked with notifying trust beneficiaries of trust happenings and trust distributions. Another big responsibility of a trustee while administering the trust is to collect, manage, and invest trust assets. In investing trust assets, the trustee has a duty to be prudent. This means balancing both long term and short term goals of the trust. It can be a delicate process of making worthwhile investing decisions without making overly risky moves.
A trustee is also tasked with paying valid debts of the trust. The trustee must also address tax issues of the trust and pay the taxes owed by the trust. One of the other major tasks of a trustee in administering a trust is to properly distribute trust assets to beneficiaries according to the terms of the trust. This can be more complicated than it may appear at first. After all, some trusts can have vague, ambiguous, or downright confusing parameters for when trust distributions are appropriate. The trustee may very well have to interrupt the terms of the trust as best as they can while exercising sound discretion.
Fulfilling the responsibilities of a trustee, as you can imagine, can take a great deal of time and effort. While the law does not speak to what fee a trustee can take for services rendered, these fees should be decided upon while considering the time and effort necessary to manage the trust. The complexity of the trust assets should also be considered.
Estate Planning Attorney
Trust administration is an important part of a trust effectively meeting its goals and purposes. That is why properly establishing a trust and selecting the right trustee are so critical. The team at Verras Law is here to help you design a trust that protects you, your loved ones, and your assets while furthering your goals. Contact Verras Law today.