Estate & Trust Administration

You May Avoid Probate With a Living Trust but it Still needs to be Administered

When considering the creation and administration of a trust, many people assume that implementing a living trust means that they can avoid the probate process entirely. In fact, probate avoidance is often the motivating factor when a person chooses to place their assets in a trust rather than leave the assets to beneficiaries in a will. However, many also incorrectly assume that if no probate is required, then nothing needs to be done when a creator of a trust passes away. Essentially, it is commonly believed that no further administration is required upon the death of the trustor. However, every estate, regardless if it is a will or trust, must be administered in some aspect and, as with probate, there are various laws relating to the administration of a trust which must be precisely followed.

 

Trust Laws and Required Processes need to Be Followed

 

In fact, many of the same procedures utilized in administering a probate are also implemented when administering a trust. As with many probate proceedings, trust administration requires an that the trustee or managing entity to conduct an inventory and appraisal of the assets at the time of death. Additionally, the trustee is responsible for the payment of all debts and taxes, as well as the distribution of the trust assets to the beneficiaries as directed by the terms of the trust. The process and laws do vary depending on your state, call to schedule a free consultation regarding the procedure in your state, (818) 360-9500

 

What are the Trustee’s Responsibilities?

The designated trustee is the person or entity responsible for all aspects of the trust administration. Administrative duties may include, but are not limited to, safeguarding trust assets, accounting for the assets, and monitoring all income and expenses, as well as selling assets, paying the necessary debts and taxes, and distributing the trust as directed in the trust document. Failure to act in a diligent or timely manner, or to act in line with the dictates of the trust, can put a trustee at risk for potential liability. Proper handling of trust administration is essential as there are many legal, tax, and financial aspects of the estate which are deadline driven and must be performed competently.

Trust Administration vs. Probate

Generally speaking, the administration of a trust is conducted in private without any court intervention; in contrast, probate often takes place in a courtroom, which is open to the public. Additionally, the trust administration for an estate may be a much shorter period of time than probate, and the cost for administering a trust is generally much less.

In Summary

Ultimately, the proper handling and administration of a trust will involve a variety of legal and financial issues which are best undertaken with the assistance of an experienced attorney. The appointed trustee is a legally and morally liable for the correct management of the trust, which must take into account not only the desires of the trustor and the terms of the trust but also all applicable state and local laws regarding trust administration.

Other Areas of Practice

Wills

 

Trusts

 

Power of Attorney

Advance Health Care Directive

 

Probate

 

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