Trust Administration

It is difficult to generalize about the effort required to administer a trust. The good news is that it is not a court supervised activity and will generally be governed by the trust document and other requirements to conform with California law. And of course, the complexity of the estate. Also, where Probates typically last from 12-24 months, trust administration can last for many years where appropriate.

The primary person responsible for administration is the successor Trustee (named in the trust). Additionally, if there is a Trust Protector specified in the trust document, that person will oversee the administration of the Trust and make sure the trustee is doing his/her job.

Trust administration will generally include the following tasks:

  • Notifying trust beneficiaries and heirs at law of the death of the Grantor;
  • Obtaining an IRS Tax ID Number for the trust;
  • Filing a final income tax return for the decedent;
  • Determining if an estate tax is due at the federal or state level on the decedent’s Estate;
  • Possibly filing an estate tax return;
  • Filing a trust income tax return annually for as long as the trust is held open;
  • Publishing a legal notice in a local newspaper regarding the death of the Grantor of the trust;
  • Collecting and protecting all of the assets belonging to the trust;
  • Opening a bank account for the trust;
  • Paying financial and last expenses of the decedent;
  • Collecting life insurance policy proceeds;
  • Determining if a formal probate needs to be opened with the court for any assets not titled in the trust;
  • Notifying all banks and financial institutions of the death and that they are the nominated Successor Trustee;
  • Notifying the V.A. (if applicable) and Department of Health Services of the death;
  • Determining Beneficiary status of all the decedent’s retirement accounts. For most 401Ks and IRAs, a stretch out is available for the beneficiary if the proper steps are taken.
  • Obtaining valuations on all property as of the date of death of the decedent including real estate and business interests;
  • Liquidating assets where necessary to pay off the debts of the Grantor;
  • Paying off all of the debts of the Grantor;
  • Paying ongoing expenses of trust administration such as legal and CPA expenses, etc.;
  • Investing assets of the trust in a safe and prudent manner during trust administration;
  • Distributing the trust assets to the beneficiaries after all of the above has been completed.

Additionally, if there are minor children the Trustee may be involved with a special Children’s Trust for years – until the children are grown and there is a final distribution.

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