What is Trust Administration?
When you have a Trust as part of your estate plan, you have to choose someone to be a “Trustee”. The Trustee is the person (or people) who have to follow the instructions in the Trust and do what it says. Depending on what type of Trust you have, you might be your own Trustee, or, you might have chosen someone else to be a Trustee. Trust Administration refers to the actions taken by the Trustee, to do what the Trust instructs them to do.
Some examples of what a Trustee does as part of Trust Administration are:
Gathering assets and putting them into a Trust bank account or investment account.
Maintaining and paying bills for real estate held by the Trust.
Filing Trust tax returns and paying taxes.
Distributing funds to the beneficiaries.
Accounting to the beneficiaries by telling them exactly what was done with the Trust funds for a set time period.
The Trustee must act in good faith, and in the best interest of the beneficiaries.
The Trustee must keep strict compliance with the terms of the Trust, as well as compliance with the applicable state and federal law. While a Trustee is generally allowed to charge a reasonable fee for the services provided, the job does come with some potential pitfalls. For example, beneficiaries might not be happy with the Trust investments, or sale of property, and/or feel like they aren’t getting their “fair share”.
Were you named as the Trustee of a Trust? What should you do next?
First, download a FREE copy of our “Trustee’s Guide - What to do when a loved one passes” available to you free, here. Then, consult with an experienced estate planning attorney to make sure that you are in compliance with all rules and laws. The attorney can be consulted before you take any action, and the attorney can even give you an outline of the terms of the Trust and what your duties and responsibilities are as a Trustee.
To take it a step further, a properly licensed attorney can advise and even manage Trust investments for you, and relieve you of that burden. It minimizes the risk of you doing something wrong when acting as a Trustee. While Trusts are a great tool, unhappy beneficiaries can initiate litigation if they feel the Trustee isn’t acting properly. Having an experienced attorney on your side will be an invaluable resource for you.
If you need help with Trust Administration, schedule your Strategic Planning Session, by calling our firm at 978-657-7437!