How is a Trust Administered?
Trusts are an essential tool in estate planning. They are also a great way to ensure that needs and wishes are met while still protecting assets from probate. There are several types of trusts, as well as several reasons why someone would use one to protect their assets and ensure they go to the right entities. From irrevocable trusts to living trusts, they all serve a specific purpose, depending on your needs. In order for a trust to work properly, a successor trustee must be named, who will administer the trust. Upon death of the grantor, the successor trustee will take over the assets and distribute them in the way the grantor laid out. This should be someone the grantor trusts to see their wishes through, as they have written them. Choosing a trustee that the grantor believes will follow through on their wishes and instructions set forth in the trust is important. Choosing the wrong trustee can be bad for the trust.
There are several duties for a trustee in terms of administering a trust. The first step of administering a trust is gathering the documents and gaining an understanding of what the assets are and how they are to be distributed. Thoroughly reviewing documents and examining who gets what assets can be helpful, especially as the process moves along. Several copies of a certified death certificate will also be required in order to move forward in administering the trust.
Next, the trustee needs to take account of the assets, and put a value on them. This may include taking an inventory of the assets and making sure everything is in order. This is important in administering the trust, as it ensures the assets are being valued properly, and are going to the right beneficiaries.
It is also important for the trustee to let the beneficiaries know about their role. This involves the trustee providing their contact information and letting beneficiaries know they are entitled to a copy of the trust. It may go without saying, but it is important to follow all state and federal laws regulating the administration of trusts.
The trustee will also be tasked with making sure any bills, debts, or final expenses are paid before the assets are distributed. This involves filing final tax return information and making sure things like funeral expenses are covered.
Once everything is handled, it is time to distribute assets to the beneficiaries. This should be carried out exactly how the grantor asks it to be, per the trust documents. If all assets have been distributed to the proper beneficiaries, the trust may be dissolved. However, the terms may call for something other than direct distribution. In that case, the trust may extend for a period of time to cover distribution of assets. For example, the grantor may have left money for a minor child, which cannot be distributed until the child reaches a certain age. If that is the case, the trustee will remain responsible for the trust until it is time to make the final distributions.
It is important to take the role of Trustee seriously and understand everything that goes into it. Consulting an experienced estate attorney can guide the trustee through the process and help them follow the law, making the right decisions for the grantor in the process.
Let The Mattar Firm Handle Your Trust
The Mattar Firm can be your complete probate and trust attorney. Our trust attorneys have the experience and tools necessary to make sure that your estate is properly represented to the probate courts, and we can be the legal team that you rely on for answers.