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Trust Administration

The process of trust administration is the transfer of property from an individual who has died after creating a trust to the beneficiaries identified in the trust in accordance with the terms of the trust. After a grantor or trust-maker dies, the person or professional institution that has been appointed trustee has the job of administering the trust. This involves paying debts and taxes, inventorying and evaluating assets, and distributing trust proceeds to beneficiaries. This is not a court supervised process.

The advantages of trust administration over a probate proceeding include:

  • Expediency – property is distributed more quickly.
  • Privacy and Predator Protection – unlike a will, a trust is not filed with the court and does not become public record. This reduces the threat of financial scams.
  • Affordability – probate costs are avoided.
  • Less Hassle and Heartache for the Trustee (and grieving family). During probate, the personal representative (aka executor) must sign and exchange numerous documents with the probate attorney or probate court on an ongoing basis. In contrast, few signatures and conversations are required in trust administration.

A trustee should meet with an attorney and possibly an accountant and financial advisor to discuss the steps involved in the initial administration, tax reporting, and ongoing distributions, if any. However, the costs are significantly less than probate costs.

* Note, if a trust is not properly funded as new assets are acquired, probate could nevertheless be required.

Good Faith

One of the paramount duties of a trustee is to act at all times in good faith and in the interests of the beneficiaries of the trust.

Record-Keeping

The trust administrator/trustee must keep good and accurate records of investments made, taxes paid, and disbursements distributed. The beneficiaries may ask to see the trust accounts at any time.

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Federal Income Tax Reporting After Someone Dies and Throughout Probate or Estate Administration

“Frieda Leonard, estate planning attorney, gave me every attention to detail I needed, asking me the right questions regarding tough end-of-life matters. Her thoughtful, personable, and professional approach put me immediately at ease, trusting her in every aspect of the process. I highly recommend her to anyone wanting excellent and affordable estate planning.”
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Attorney Frieda Leonard

Practicing Law for 27 Years
 

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