General Trust Administration Steps

Trust administration is an important role which the trustee(s) must undertake to settle a decedent’s estate. Below are the general steps involved in completing the process. Trust administration involves legally required actions which are important to note. Give Legal Notice As Required The trustee is required by law to notify certain people when administering the trust in question. These people are the trust beneficiaries and legal heirs of the estate. The number of notifications required will vary depending on the number of named beneficiaries and legal heirs. This also requires that the trustee account for the family of the decedent, including children from prior relationships and family members who might initially be unknown. Trustees are also advised to notify creditors of the decedent or the decedent’s estate. After the trustee has notified these individuals, each individual has a window of time in which they can contest the trust. Creditors of the decedent also have a limited opportunity to submit claims for repayment at this point. Identify Trust Assets & Other Assets Of The Estate Trustees have fiduciary responsibilities to the decedent to effectively manage the trust assets in the best interest of the decedent and beneficiaries. It is crucial that the trustee have an accurate record of all assets held in the name of the trust. The trustee should also know which assets of the decedent are not held in the name of the trust, as these assets will also need to be distributed in some way according to the decedent’s estate plan. Manage Trust Assets Once the trustee has an accurate picture of the assets in the decedent’s estate, they should invest certain assets. The trust administration process can be lengthy, so it is important to use the trust assets wisely and in a productive manner. The trustee should aim to maximize returns and minimize risk where possible. Assets that are not productive during trust administration (such as real property with no tenants) should also be managed. Real property can be rented, sold, or otherwise managed according to the decedent’s wishes or limitations. Have Assets Appraised, If Necessary Certain assets will need to be appraised during the trust administration for tax and other purposes. This should be done as soon as possible during the administration. Pay All Necessary Debts If the decedent left any outstanding debts when they passed, those debts will need to be repaid in a timely manner. If a trustee fails to pay debts they should have paid on the decedent’s behalf, the trustee could incur personal liability for those debts. Although unpleasant, paying outstanding debts is a crucial step in the trust administration process. Prepare The Trust Accounting Another legally required job of the trustee is to prepare a trust accounting. The California Probate Code specifies a format which the trustee must follow to account for the financial status of the estate. This includes reports of any accounts, expenses, compensation for trustees and legal counsel, and other necessary records that help paint a picture of the estate’s financial health. Trustees may need to provide the sort of accounting more than once during their service as trustee. Establish & Execute A Plan For Distribution The trust document outlines how the decedent wanted their assets to be allocated, and it is the job of the trustee to enforce the terms of the trust. When following the decedent’s instructions, the trustee should also aim to minimize expenses as much as possible. At this point the trustee will need to regularly communicate with beneficiaries. The trustee must then distribute the assets according to the plan. This can include transferring title of certain assets, paying money from the decedent’s estate to named persons or entities, or other tasks to allocate the decedent’s property accordingly. Weiner Law 12707 High Bluff Drive Ste. 125 San Diego, CA 92130 (858) 333-8844 https://weinerlegacylaw.com/