What is Trust Administration?
Trust administration refers to the management of property held in a trust by a named trustee—according to the terms in the document and for the benefit of those who will inherit under the trust. There are a number of steps involved which safeguard the administration of a trust. Mandatory notice must be given to all beneficiaries named in the trust. Once this notice is received, the beneficiary has only a certain number of days to contest the trust. If no contest if filed within this time period, the ability to file a contest may be surrendered.
If real property is held in the trust, titles must be transferred to the successor trustee. An affidavit will be recorded with a certified copy of the death certificate against real property held in the trust, transferring the title of the property from the decedent to the successor trustee. If property is transferred from parents or children by any method which is exempt from California property tax reassessment, the proper exemption form must be filed. Once all the real property is taken care of, other trust assets must have titles transferred. The successor trustee must ensure all debts of the decedent are paid, including taxes. When all assets are collected, all debts paid, all tax returns filed, and all debts paid, the remaining trust assets will be distributed.
What Does a Trust Administrator Do?
When a revocable living trust is created, you name yourself as trustee during your lifetime. You also name a successor trustee to take over administration of the trust after your death, or in the event of your incapacitation. Naming a bank or an attorney as co-trustee during your lifetime allows you to benefit from their investment and trust management experience while determining whether you would be comfortable leaving them to administer the trust after your death.
The trust administrator takes care of all the assets in the trust for the beneficiaries named in the trust. A trust administrator can be an individual or an organization. When a trust administrator fails to comply with his or her legal duties, that trust administrator could become personally liable for any losses. The newly appointed trust administrator will want to assess the value of the assets held in the trust after all liabilities have been deducted.
This act will determine whether the trust is liable for federal or state taxes, and may vary considerably, depending on the value of the trust. The trust administrator must, at all times, act in good faith and in the best interests of the trust beneficiaries. If the trust administrator realizes any personal gain from carrying out the trust transactions, these must be disclosed. If a trust administrator fails to comply with the legal duties as set forth under California law, the beneficiaries of the trust may sue the trust administrator.
The trust administrator must keep records of all correspondence, all expenses and taxes paid, and all assets held in the trust (including any investments made) assets disposed of or any other transaction made for the estate. The beneficiaries of the trust are allowed to ask to see the trust accounts, therefore, the trust administrator must be able to explain any transaction. A trust administrator must always make prudent decisions. In addition, the trust administrator must treat all beneficiaries equally and fairly. Below is a sample list of the tasks a trust administrator might be asked to perform:
- Obtain legal documents and records necessary to administer the trust;
- Obtain legal documents and records necessary to certify the validity of the trust when dealing with third parties;
- Collect any money owed to the trust;
- Maintain an inventory of all trust property;
- Consult financial, legal, or tax advisors when necessary to properly administer the trust;
- Pay any expenses or debts attributed to the trust;
- Obtain valuations or appraisals for trust assets;
- Sell trust properties;
- File all tax returns;
- Provide up-to-date information to trust beneficiaries;
- Execute documents transferring title to trust property to beneficiaries, and
- Distribute trust income and property to beneficiaries.
How to Choose a Trust Administrator
Unfortunately, many people fail to put sufficient thought into choosing a trust administrator. The trust administrator you choose must follow all the rules of your trust and will have a significant amount of responsibility after your death. Obviously, you will want to choose a person you trust, as well as a person who you believe, will follow your wishes closely after your death. It is important to choose a person who lives fairly close to you, as that person will be involved in administering your trust for months—or longer—following your death. You might not want to choose a family member for this job.
While you might trust a loved one, ask yourself whether you want to place that person in a position of having other family members questioning his or her administration of the trust. Whoever you decide to name as a trust administrator, sit down and have a long, honest talk with that person, rather than simply naming him or her and hoping for the best. Make sure you are both on the same page as far as your wishes after your death, particularly what assets you choose to leave to which beneficiaries.
Could You Benefit from Trust Administration Services?
Trust administration services can remove the emotion associated with the job of trust administration. An experienced attorney can anticipate and act upon events throughout the life of the trust, often saving considerable expense. Tense situations between family members and beneficiaries can be largely alleviated when an attorney provides trust administration services.
How Mark Gullotta Can Help
Remember—estate planning is not something you simply “set and forget.” Attorney Mark Gullotta provides an entirely simplified estate planning process, which not only protects your loved ones, it also minimizes the unexpected. Attorney Gullotta offers upfront pricing, a comfortable planning experience, and will always ensure you are informed every step of the way. Should you decide to choose Attorney Mark Gullotta as your attorney you can be sure the job will be accomplished in a professional, honest, experienced manner. Mark Gullotta serves San Mateo County area, such as San Bruno, Millbrae, Burlingame, South San Francisco, Daly City Colma, and the City of San Mateo and has been an estate planning attorney for more than 15 years, certified as one of the top attorneys in North America from 2015 to 2019. For experienced, knowledgeable estate planning advice, contact Mark Gullotta today.
Do You Need Proactive Trust Administration Services?
Not everyone needs Proactive Trust Administration Services. But if you as the Trustee or as a beneficiary feel that the situation is too complex, hiring a professional attorney can be one of the wisest moves you can make.
How to find out?
We offer a free assessment of your situation. The outcome can be one of several:
- You have a simple case. You can manage the trust without an attorney.
- You have a very complex trust. We will be happy to refer you to offices who specialize in such complex situations.
- You realize that administrating the trust requires a lot of responsibility and hands-on effort. You feel that you need an attorney to make sure you conduct yourself in an efficient manner and abide by all legal duties and responsibilities. Proactive Trust Administrative Services can help.