Do It Yourself Trust Administration?

Trust administration is the work that has to be done after the death of a Trustor. The person or entity that is named as successor trustee has certain duties and obligations they have to perform to wind up the Trustor’s financial affairs and make distributions to the beneficiaries. If any of the beneficiaries are minors who are receiving distributions at various intervals, the administration of the trust can last years.

Your basic duties as a successor trustee involve the collection, management, investment, and distribution of the trust assets. One of your duties to the beneficiaries is to keep them informed of the trust administration so you need to keep careful records of all the transactions that you perform as trustee. Here is an example of some of the tasks you need to do when you become successor trustee of a trust. Some are time sensitive and lead to consequences if not done in a timely manner.

1. Obtain a taxpayer ID number for the trust.
2. Notify all the heirs and beneficiaries of the Trustor’s death and the existence of the trust. If the beneficiaries request it, a copy of the trust must be provided to them.
3. Open a new account in the name of the trust with you as the Trustee.
4. Inventory and Appraisal. You must prepare an inventory of all of the decedent’s assets and determine their fair market value as of the date of the decedent’s death.
5. Record Keeping. This is very important. You as the Trustee must keep careful record of all the transactions you make on behalf of the trust. Beneficiaries may request that you give a full accounting and report not less often than annually or at the termination of the trust unless a beneficiary waives an accounting in writing.
6. File a federal estate tax return if estate taxes are due. Also file federal and state income tax returns.
7. File for a Parent/Child exemption if appropriate. If real property is inherited by a child from a parent, there is an exemption for reassessment of property taxes.
8. File an affidavit of death in each county where the decedent owned real property.

Depending on the complexity of the trust and whether it is ongoing for a period of time, you may have other tasks and responsibilities such as managing the trust investments, make distributions of income and principal to the beneficiaries in accord with the terms of the trust. Being a trustee is a substantial responsibility and a trustee often seeks legal assistance. At Law Office of Scott C. Soady, A Professional Corporation, we also see successor trustees who have started to administer a trust but found it difficult or time-consuming to handle all of these details and retained our office to finish the administration. Give us a call for assistance with all phases of trust administration.