A successor trustee takes responsibility for administering the trust under its terms after the event that brings them into office. When that event is a death, the work can include securing assets, identifying beneficiaries, addressing expenses and taxes, keeping records, and carrying out distributions or continuing trusts. Avoiding probate simplifies part of the process, but it doesn’t eliminate administration. The trustee still has to work out what the document requires before money or property changes hands.
First, Confirm You Are the One Entitled to Serve
Start by confirming that you are the person entitled to serve, and complete whatever is required to accept the role. The trust and its amendments may set an order of successors, require action by a co-trustee, or lay out a particular appointment procedure. Financial institutions will also want documentation establishing your authority. Being named somewhere in the document doesn’t answer every question about when you begin serving or whether somebody else has priority.
Read What the Trust Says Happens After the Death
Next, read the provisions that apply after the death. A trust may direct immediate distribution once administration is complete, continue for a surviving spouse, or divide into separate shares for children or other beneficiaries. Some portions may remain revocable while others become irrevocable. Don’t assume the death means the trust terminates, or that everyone named in it is entitled to an immediate check.
Identify and Protect the Trust’s Property
The trustee needs to identify and protect the property that actually belongs to the trust. That can mean obtaining account information, securing real estate, confirming insurance and arranging appropriate valuations. Assets outside the trust may need to be handled by a personal representative or paid directly to a named beneficiary. If you also serve as personal representative, keep the two capacities and their records distinct so there is no confusion about which assets and obligations belong in each administration.
Keeping Beneficiaries Informed Is a Legal Duty
Communication is a legal responsibility, not just a courtesy. Massachusetts law requires a trustee to keep the qualified beneficiaries reasonably informed about the administration and to respond promptly to reasonable requests for information. It also requires written notice of the trustee’s name and address within 30 days after accepting the trust or the trust becoming irrevocable, whichever is later, and an account to distributees and permissible distributees at least annually and at termination. Check the trust and the statute together to work out what applies to you.
Expenses, Taxes and the Schedule K-1s
Expenses, liabilities and taxes need review before any final distribution. The trustee may need to coordinate with the estate’s personal representative and the tax preparer rather than paying every bill straight out of the trust. A death can change the trust’s tax reporting, create a need for a tax identification number, or trigger fiduciary income tax filings. Beneficiaries may receive Schedules K-1 reporting items allocated to them. Deal with these early enough that you don’t distribute money you will need later.
Manage the Property With All the Beneficiaries in Mind
Trust property must be managed with attention to the beneficiaries’ respective interests. Keep trust funds separate, document decisions, and get proper help with investments, accounting or legal questions. Being a beneficiary yourself does not switch those duties off. A proposed purchase of trust property, or any other transaction touching your personal interests, should be reviewed before it happens rather than explained afterwards when another beneficiary asks about it.
Distributing, and the 30-Day Objection Window
When distribution is appropriate, follow the actual terms and document what each recipient receives. On termination, Massachusetts requires the trustee to proceed expeditiously to distribute, subject to a reasonable reserve for debts, expenses and taxes. There is also a provision worth knowing: the trustee may send beneficiaries a proposal for distribution, and a beneficiary’s right to object ends 30 days after the proposal is sent, but only if the proposal told them about that right and the time limit, and gave them enough facts to evaluate it. Other trusts continue for years instead, with ongoing management and reporting. We can help you work out which situation you are in and explain it to the beneficiaries. Our trust administration overview covers the wider process.
If you have just become the trustee and are not sure what has to happen first, we do this work constantly and can map it out with you.
Book a free 15-minute consult call with our Lead Intake Coordinator, Nicole Ott, or give us a call at 978-657-7437. There is no charge and no pressure. The goal is simply to work out what your family actually needs to do next.
You can also download our free report, 5 Trusts That Can Wreck Your Estate Plan.
