Trust administration fundamentally involves management, specifically of the trust itself and the documentation associated with a trust. That can include the trust documentation, any listing of the beneficiaries named in the trust, certified copies of the death certificate of the trust’s creator (also sometimes referred to as the settlor, and can involve multiple people), and any additional documentation pertaining to the trust.
The named trustee is responsible for administering a trust to the beneficiaries according to the legal agreement. Before trust administration can begin, all the documentation should have been located and reviewed before any action can take place.
Notify Family and Beneficiaries
Upon the death of the trust’s creator, the family members need to be contacted and made aware of the situation. Furthermore the individuals identified as beneficiaries of the trust need to be contacted.
Notification fulfills several functions. First of all, it’s important that all named beneficiaries be made aware of the settlor’s passing as quickly as possible. Secondly, state law requires notice to be given to the beneficiaries within 60 days. That requirement also provides an additional deadline of 120 for any beneficiaries seeking to file legal action challenging the validity of the trust language.
List the Assets
To ensure the assets get passed to the correct beneficiary, trust administration requires an inventory to be taken on all assets identified in the trust.
An inventory helps confirm that all listed assets have not disappeared for one reason or another. It also helps the administrator with the task of asset distribution.
In addition to listing the assets, an inventory needs to be taken regarding any outstanding debts against the settlor’s estate. In both situations, the trustee tasked with administering the trust could face liability for failing to address the inventory and the debt.
Every trust has its own unique features and presents its own specific challenges, but every trust requires responsible management to function properly.
• Asset Investment
This can include maintaining the physical locations of property assets, managing financial investments, and generally ensuring the trust itself retains worth and value.
• File finances, including tax information
Seems like an obvious step, but filing tax information on the trust can be easily overlooked if the trustee does not have the time or interest to focus on maintaining the trust itself. A lack of oversight can result in severe legal and financial penalties that could negatively impact the trustee and potentially damage the trust’s integrity. Additionally, the trust itself has to be monitored by someone capable of a proper accounting to ensure the trust does not lose integrity.
Naturally, it may be impossible to find a trustee who has certification as a professional accountant/lawyer/estate executor. As such, it’s important for the trustee to be willing to engage.
• Delegation of Duties
Trust administration can involve decisions involving accounting, legal practice, real estate, investment, and a number of other requirements. While a single trustee could address those individual challenges themselves, they should also have the knowledge of knowing what they don’t know and the ability to delegate the responsibility of those tasks to people they trust to do the job right.
To find out more about trust administration, contact the Law Office of Andrew Fesler today.