If you are the administrator to a trust, you may be feeling a little overwhelmed. Trust administration is an important responsibility, and you may be unsure of your duties and responsibilities. By working with a Palmdale CA estate planning lawyer, you can be sure that you properly administer the trust that has been put in your control. Call Herbert Law Office today to learn more about trust administration.
We Can Help With Common Trust Administration Tasks
Every trust is different; however, many require similar tasks throughout their administration. Most trusts detail everything that you must do in clear terms, while some leave certain tasks to your interpretation. Herbert Law Office can help answer your questions, as well assist with the following trust administration tasks:
- Obtaining and certifying legal documents and records related to the trust;
- Collecting money that should be deposited into the trust;
- Making an inventory of property in the trust;
- Consulting advisers regarding finances and taxes for the trust;
- Paying expenses and debts related to the trust;
- Managing investments and other assets of the trust;
- Seeking appraisals of assets belonging to the trust;
- Selling property in the trust;
- Managing records of income and expenditures;
- Submitting tax documents to the government for the trust;
- Informing trust beneficiaries of activities;
- Distributing property or other assets of the trust; and
- Transferring titles of property to trust beneficiaries.
How Does the Trust Administration Process Work?
Although every trust is somewhat different, trust administration typically follows a process. That process typically begins when the trust originator passes away. However, some trusts will begin the process upon formation. In either event, working with an experienced trust attorney can help give you peace of mind as well as ensure that you administer the trust properly.
1. Beginning the Process
Trust administration begins by giving notice to all beneficiaries and heirs of settlers. You must send notice within a certain period of time, and the recipient may request a copy of the trust. Recipients may contest the trust within a certain period of time. If no one contests the trust, then a notice must be mailed stating that recipients forfeit their rights to file a contest. If no notice is mailed, then recipients may have up to four years to file a contest.
There are many requirements of the notice of trust. An attorney can help you navigate this complex process. If you do not provide notices properly, then you could be held liable as a trust administrator.
2. Dealing With Real Property
When a trust holds real property, you have to take several steps in order to vest title in the administrator so that you can manage real property. For example, you will have to file a number of legal documents in order to transfer property and manage it, including the following:
- Affidavit of Death of Trustee
- Consent of Successor Trustee
- Preliminary Change of Ownership
An experienced attorney can prepare these legal documents for you as well as help you handle any real property in your trust.
3. Managing Other Assets
Trusts often have an array of assets that must be managed and distributed through trust administration. In order to manage those assets, you will need to obtain a federal tax identification number for the trust. You should never use your own social security number for administration of another person’s trust.
One of your steps in trust administration will be to transfer assets into proper trust accounts. This may require opening new accounts and placing assets in the proper amounts. It’s important to distribute assets properly according to the wishes of the originator.
4. Paying Debts and Taxes
Trust administration often requires payment of debts as well as processing of taxes. You will likely have to file a federal estate tax return. This can become extremely complex, especially if the decedent has already made other gifts throughout their lifetime. You should work closely with a tax professional and an attorney to make sure you pay all debts appropriately and handle taxes through trust administration.
It is necessary to keep detailed accounting of a trust. As a trust administrator, you must keep records and inform beneficiaries of changes in the accounting. If a trust involves significant assets, investments, and variable assets, then accounting can be particularly complex. An accountant, CPA, or attorney can help ensure your accounting of the trust meets legal requirements and is accurate.
Once assets are managed, debts are paid, and taxes have been filed, a trust is generally ready for distribution. However, you must determine if you have other issues, such as sub-trusts, beneficiaries who are minors, survivor’s trusts, and more. An attorney can review all of your trust documentation to determine if trust administration is complete and ready for distribution.
Contact a Lawyer for Help With Trust Administration
Trust administration can be an extremely complex process. It’s therefore best to work with an attorney who has experience handling trusts and other estate matters. There are many legal requirements that you as the trust administrator must meet. Contact Herbert Law Office today.