The Often Overlooked Importance of Trust Administration

Trust administration is often overlooked. Depending on the size of the estate, it can be complex and overwhelming for a trustee or successor trustee to navigate the process. An experienced lawyer in California from our distinguished law firm can ensure your trust is administered properly. If you have lost a loved one and need help administering their trust, a trust administration lawyer can be of vital assistance.

What is Trust Administration?

Trust administration is the process of managing and distributing the assets of a trust. This can include overseeing the investments of the trust, paying out benefits to beneficiaries, and managing taxes and other legal obligations.

The trust administrator, or trustee, is responsible for ensuring that the trust is run in accordance with the wishes of the creator of the trust, and must act in the best interests of the beneficiaries. They must also keep accurate records of all transactions and dealings related to the trust.

The role of a trustee can be quite complex, and it is important to have a good understanding of both financial and legal matters. The trustee must be able to work with other professionals such as accountants and lawyers, as well as communicate effectively with beneficiaries. Depending on how expansive an estate is or how many trust assets need to be settled, the task can be daunting. Our law firm provides comprehensive services to trustees and families in need of assistance.

If you have been named as the trustee of a trust, or are thinking of setting up a trust, it is important to seek professional advice to ensure that you understand all of your obligations. They can help you with every aspect of trust administration, from setting up the trust to managing it on an ongoing basis, as well as provide advice and assistance if there are any disputes between beneficiaries or other interested parties.

What Are My Duties as a Trustee?

A trustee has a number of specific fiduciary duties, which are set out in the trust instrument and by law. These duties include but are not limited to:

• Act in good faith and in the best interests of the beneficiaries – The trustee must always act in good faith and in the best interests of the beneficiaries. This means that the trustee must make decisions that are in the best interests of the beneficiaries, and not in his or her own self-interest.
• Manage trust property prudently – The trustee must manage the trust property prudently and carefully. This includes investing the trust property in a way that will preserve its value and using it only for purposes that are in line with the terms of the trust.
• Keep accurate records – The trustee must keep accurate records of all transactions involving the trust property. These records should be kept in a safe place and made available to the beneficiaries upon request.
• Comply with the terms of the trust – The trustee must comply with all of the terms of the trust. If there is anything that the trustee does not understand, he or she should seek legal advice before taking any action.
• Avoid conflicts of interest – The trustee must avoid any conflicts of interest. This means that the trustee cannot use the trust property for his or her own benefit, or for the benefit of any other person or entity with which the trustee has a personal or financial relationship.
• Keep beneficiaries informed – The trustee must keep the beneficiaries informed about all matters affecting the trust. The trustee should provide regular updates and accountings, and be responsive to any questions or concerns that the beneficiaries may have.

By following these duties, a trustee can help to ensure that the trust is administered properly and that the beneficiaries receive the full benefit of the trust property. If you breach any of your fiduciary duties, you may be held personally liable for any losses suffered by the trust or its beneficiaries. For this reason, it is important to seek legal advice before undertaking any actions as a trustee.

What If I Don’t Fulfill My Duties as a Trustee?

If you break your duties as a trustee, there are a few different things that could happen.

Trustee Removal

The first is that the court might remove you as trustee and appoint someone else in your place. If this happens, you might have to pay damages out of your own pocket for any losses that occur because of your breach of trust.

Court Ordered Modifications

The second possibility is that the court might modify the terms of the trust. For example, if you were supposed to distribute assets equally among beneficiaries but you gave more to one beneficiary than another, the court could order you to redistribute the assets so that everyone gets an equal share.

Contempt of Court

The third possibility is that the court could find you in contempt of court. This could result in a fine or even jail time.

Of course, the best thing to do is to fulfill your duties as a trustee so that none of these things happen. But if you do find yourself in a situation where you have breached your trust, it’s important to seek legal help right away so that you can try to minimize the damages. However, it is best to hire help from the start to ensure accuracy.

How Can A Trust Administration Lawyer Help?

Estate planning lawyers provide comprehensive support throughout the entire trust administration process, ensuring that your trust is managed in line with the grantor’s wishes. They can handle everything from reviewing trust assets, such as investment accounts, to addressing estate taxes, including filing the necessary federal estate tax returns. Although a trust can help avoid probate court, there are still legal obligations to meet, such as paying estate taxes and settling any outstanding debts with creditors. Trust administration lawyers can actively assist you in navigating these tasks and more, making sure nothing is overlooked.

Our services include:

• Filing Estate Tax Returns: We handle the process of preparing and filing federal estate tax returns to ensure compliance with tax regulations.
• Reviewing Trust Assets: Whether it’s investment accounts, real estate, or other valuable assets, we meticulously evaluate and manage them to meet the terms set by the grantor.
• Settling Debts with Creditors: We ensure that all outstanding debts are properly paid, minimizing complications for beneficiaries.
• Managing Real Estate: From selling to managing real estate properties held in the trust, we assist in overseeing these important assets.
• Distributing Trust Assets: We carefully distribute the trust’s assets to the appropriate beneficiaries, ensuring that the grantor’s instructions are followed precisely.
• Handling Financial Accounts: We review and manage bank accounts, retirement funds, savings accounts, and other financial holdings within the trust to ensure smooth administration.
• Settling Income Taxes: We assist in paying off any outstanding income taxes, avoiding penalties or legal complications.

By working with an attorney to handle the complex tasks involved in settling debts, managing assets, and paying taxes, they can enable you to focus on carrying out the grantor’s wishes and protecting the interests of all beneficiaries.

If you are looking for assistance with estate planning needs, contact us today by calling 916-685-1225 and get started.