If you have established an estate plan, been involved in the probate process, or started researching either of these things, you have probably heard of estate administration. Fewer people, however, have heard of trust administration. It is, however, an important thing to be aware of. This is especially true considering there is a common misconception that trusts do not require follow up attention after the settlor of the trust passes on. People tend to think transfers and other trust affairs happen automatically. Trust administration, however, involves many steps, administrative duties, and expenses, and is intended to help ensure that a trust is effectively administered.
What is Trust Administration?
Trust administration is the term used to reference the trustee of a trust’s management of trust property according to the terms of the trust document for the benefit of the beneficiaries after the settlor of the trust has passed away. Much like estate administration, there are many important steps that must be taken during the trust administration process. The process begins by a notice being provided to all beneficiaries and heirs of the settlor (the person who established the trust). The beneficiaries are allowed a certain amount of time to contest the terms of the trust and, if not done so in the allotted time, this right is waived.
Should there be real property held in the trust, the title is to be given to the successor trustee to be managed per the trust document instructions. An affidavit, along with a certified copy of the settlor’s death certificate, should be recorded for all real property held in the living trust. This transfers the title from the settlor to the successor trustee.
After real property is addressed, the trustee is tasked with gathering and managing all other assets, such as financial assets including bank accounts, and have the title of those assets transferred into the name of the successor trustee. To do so, the trustee must first get the trust’s federal tax identification number in order for income earned from the accounts to be accurately reported to the IRS.
The successor trustee must also pay debts and liabilities of the deceased settlor. Taxes in particular can be complicated, especially when a sizeable estate is involved. Additionally, most of the time, the successor trustee is required to maintain a detailed accounting regarding trust transactions.
After all of this, the trustee is to distribute the assets remaining in the trust. The terms set forth in the trust document should direct how this should happen.
Estate Planning Attorney
As you can see, trust administration involves many detailed and important steps. It is important that everything is properly executed. At Verras law, our dedicated team of estate planning attorneys can help you and your loved ones at any step in the estate planning process. Whether you need a comprehensive estate plan in place to protect yourself and your loved ones, or you need help with probate, or you need help with trust administration, we are here for you. Contact Verras Law today.