Trust Administration

If you are asking this question, and you are either a Trustee or a Beneficiary, you should probably call us right now.  Likely you were named to this position but were not given any advanced notice.  You would benefit from a call.  Please visit our FAQs on Estate Planning, as well as those contained in this section, if you would like to do so before we talk. 

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Trust Administration is the process by which the assets of the Trust, sometimes referred to as the Estate, pass from the Trust to the Beneficiaries in accordance with the terms found in the Trust.  Basically, it’s a plan.  And if the Trust is well written, the Trustee follows the instructions in the plan.  

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Whoa, whoa, whoa!  Actually, there is probably a lot you may need to do.  Filing estate taxes and making a tax exemption for starters.  These things have deadlines, so if you are not sure what you need to do, or not in the best condition to deal with them, please contact us.  Also depending on terms found in your Trust, you may have many other things that will need your attention.

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Some common reasons why you might want to retain counsel: 

• Accounting for Trust assets. The Trust assets may be held in a complicated manner.  or you may have assets that were supposed to be in the Trust, but something happened, and they were never moved, or titled, in the name of the Trust.  Accounting for assets and making reports to the beneficiaries is not a process familiar to most businesspeople. You will need to understand Trust accounting and the unique schedules that are involved.  If you don’t do it correctly, you may open yourself up to liability, court cases, court costs, other unpleasantness. 
• Navigating Administration:  A Trust with minimal assets and only one Beneficiary may be simple enough to be administered by a lay person.  As you slide up the scale on number and type of assets, complexity of assets, and number of Beneficiaries, the administrative workload can be daunting. Meetings, deadlines, producing reports, maintain communications with Beneficiaries, are but a few of the Trustee’s responsibilities.  Also, having a Trust attorney to just review the Trust documents with you to make sure they are not asking you to do something that violates public policy, is an important first step. 
• Having an Intermediary: The stress of the loss of a loved one can result in emotions spilling out in unnecessary ways. Having someone to advise and lean on is one of the biggest advantages of using professionals to assist in the process. 
• Accessing other Professionals: Trust law provides that a Trustee can seek professional help when needed. In some cases, state law, or the Trust itself, may require the Trustee seek assistance.  The type of Trust asset may dictate the use of professionals.  Having an advisor who can identify Trust administration needs and recommend experienced and cost-effective professionals to meet these needs adds value to the process.

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No, and frankly there are certain cases where it may be better to find your own counsel.  Having the attorney who drafted the Trust also assist you in administering the Trust does have some benefits.  They may be familiar with the Trust documents and can hit the ground running to assist.  Or you may feel no relationship with them and prefer to establish your own relationship.  Ultimately, select a Trust Administration attorney you are comfortable with to assist you.  Like any other decision to hire: quality of work, attentiveness, responsiveness, cost, and other factors may come into your decision.

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It depends on what the Trust requires, but here are some standard things that are required of almost every Trustee, not necessarily in chronologically order.  

1. Find the Trust and read it;
2. Ask for help as soon as you need it;
3. Take inventory of the Trust assets;
4. Value the assets;
5. Pay the debts and expenses of the Estate;
6. File the Estate Taxes;
7. Notify the Beneficiaries;
8. Distribute the assets in accordance with the Trust instructions;
9. Conduct a final accounting and distribute to Beneficiaries;
10. Terminate the Trust.

Many other things may be included under the Trust terms.

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If you are a Trustee, you have certain duties.  These duties include: a duty to administer the Trust according to the terms of the Trust; a duty of loyally to all Beneficiaries, and to keep the Beneficiaries reasonably informed in the administration of the Trust, a duty to account to the Beneficiaries on a regular basis, and a duty to protect the Trust assets.

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Ah, excellent question. Trustees have certain duties to the Trust and its Beneficiaries.  Sometimes they can get in trouble by acts of omission, and not because their hearts aren’t in the right place. The three biggest ones we encounter are:

• Trying to do everything yourself when you don’t feel qualified or have to time
• Acting without reading and understanding the Trust terms and applicable laws
• Ignoring your Beneficiaries or disregarding the Trust instructions

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As a Trustee you owe certain fiduciary duties to the Trust and its Beneficiaries. The Trust document can make the duties more stringent or relaxed, so long as they don’t circumvent statutory requirements (the law) or violate public policy: Some of these fiduciary duties are:

• The duty of loyalty, to act in the best interests of the Beneficiaries,
• The duty of disclosure, to disclose material facts to Beneficiaries and keep them reasonably informed on the status of assets and actions of the Trustee,
• The duty of impartiality, to treat each Beneficiary equally, and
• The duty to enforce and defend claims involving the Trust.

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In some cases, people just find it too emotionally triggering to be involved in the weeds of Trust Administration and prefer to have someone else to the leg work. They instead choose to take on a more supervisory role.  Generally speaking, your need for professional assistance will depend largely upon what the Trust requires you to do and your individual capacity to handle those tasks.  Some of the most well-trained businesspeople or lawyers prefer to retain counsel, a fiduciary, or other professionals to assist with Trust Administration.  Not because they don’t have the time, but because they don’t have the experience to handle some of the tasks.  It is important to keep in mind that you are not in this alone. At CASHMAN LAW we have a network of professionals that can match your needs.

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The Decedent’s estate is liable.  Creditors at the time of the Decedent’s death are entitled to recover their debts against the assets of the estate.  If the assets in the estate are insufficient to cover any unpaid debts, these will likely be cancelled by the creditors.  

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Trustees may be unfamiliar with the duties and functions involved in the position they find themselves, especially when serving as a successor trustee after the death of the creator(s) of a revocable living Trust. While most people can quickly understand the general nature and scope of a Trustee’s fiduciary responsibilities, the details involved in asset management, accounting, and reporting can present problems and create stress.

If you are acting as a Trustee for the first time or have concerns about performing your duties in accordance with the law, it can be essential to hire an experienced Trust Administration attorney who has the knowledge to help you avoid allegations and liability.

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Well, you should know your rights as a Beneficiary, both granted by state law and by the Trust. These rights can be lessor or greater depending on the Trust terms. These rights generally include:

• Notice of your status as a Beneficiary;
• Obtain copies of the Trust documents;
• Fair and impartial treatment by the Trustee; 
• Be timely provided an accounting of the Trust assets; and
• Disclosure of facts about claims.

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The first step is generally to request in writing that the Trustee remedy their behavior. If the Trustee does not comply, a Beneficiary may file suit in court.

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Sometimes.  If you have received notice from the Trustee, or are just aware you are a Beneficiary it can’t hurt to give us a call and get a free initial consultation.  Sometimes the Trustee is doing things wrong and doesn’t know it.  This can usually be remedied with a simple phone call. Sometimes Beneficiaries’ expectations are skewed because they don’t understand the process.  Sometimes some unfortunate things are happening, or have happened in the past, and deadlines exist that will bar you from complaining later, or even asking you for more clarification.

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