What is Trust Administration?

What is trust administration?

family_on_lawnAfter the death of the Settlor (the person who created the trust), there are certain steps that have to be taken to comply with state law to preserve the federal estate tax exclusion amount (if necessary) and to change title to assets. This is called a “trust administration” and the complexity of the administration depends upon the number and type of assets, their total value and whether the trust includes tax planning provisions. This process is similar to steps that must be taken in a probate, but without the court oversight.

What must be done?

Assets should be appraised to determine the new cost basis and an inventory must be prepared to determine the net worth of the decedent to determine if an estate tax return is required to be filed. If the estate is valued at more than $5.34 million (indexed for inflation as of 2014), then a federal estate tax return must be filed. Income tax returns also must be filed for the decedent and also for the estate if there is a period of time between the decedent’s date of death and distribution. State law requires that the decedent’s Will be filed with the Superior Court in the county in which the decedent was living at the time of death. If any part of the trust became irrevocable, then the decedent’s heirs and trust beneficiaries must be provided notice of that fact and they are given an opportunity to ask for a copy of the trust. If the decedent owned real property, then notice of death must be sent to the County Assessor in each county where the decedent owned real property.

Does It Take Time or Cost Money to Handle the Trust Administration?

Unlike a probate, the time and expense depends upon the terms of the trust and the assets involved. It is very important to hire an experienced attorney to assist you during this time as this is an area that most people have little experience in and it is a job where the trustee owes certain legal duties to the beneficiaries. It is much easier to start the process properly, than to hire an attorney later to fix what went wrong. There are tax returns that will need to be prepared and filed, documents to be prepared to transfer assets to the beneficiaries and formal notices that must be sent.

How We Can Help You – If You Are the Successor Trustee?

As your attorneys, our job is to assist you in carrying out your duties as Trustee. We will help you collect and value assets, pay debts, pay taxes and prepare the necessary transfer documents in connection with the eventual distribution of trust property to the appropriate beneficiaries. We will also prepare any accountings and reports to be given to the beneficiaries. We strongly encourage you to contact the experienced attorneys of The Law office of Michelle A. Goff today.

How We Can Help You – If You Are a Beneficiary?

If you are a beneficiary of a trust, you have rights. The exact nature of those rights is governed by the California Probate Code and the specific trust document. If you feel that the successor trustee is not performing their fiduciary duties, we can assist you in enforcing your rights and assist you in moving toward a resolution of the issues. We strongly encourage you to contact the experienced attorneys of Michelle A Goff Law Group today.