Trust administration, the process of arranging for the distribution of assets, can occur after the death of one or both of the decedents. Trusts do not have to go through probate. Likewise, trust administration is not a court-supervised process. Trust administration is the process that occurs before assets are transferred to beneficiaries, the individual or individuals who are receiving assets from the trust.
When trusts are created, the grantor, or person who created the trust, transfers the ownership of property to another person or institution, called the “trustee.” Trustees, the parties administering the trust, can be a financial institution, private fiduciary, or other individual. In some cases, the trustee and the beneficiary are the same person. It is the trustee's role to manage these assets for the trust's beneficiaries. Trusts create a fiduciary relationship between the trustee and the beneficiaries, meaning the trustee must act in the best interests of the beneficiaries.
For some individuals, it helps to have an experienced attorney administer a trust. There are multiple legal duties involved with managing the assets in a trust, and this can be a time-consuming process, especially after a loved one's death. A trust administration attorney can help you take care of the responsibilities associated with managing a trust in California.
There are multiple responsibilities involved with trust administration in California. Trust administration duties may include:
Identifying assets. Trustees have an obligation to ensure the transfer of trust assets to beneficiaries, and can be liable if assets are lost, stolen, or destroyed. This includes identifying assets that are in or out of the trust.
Paying off debts. Grantors may pass away with debts, especially in cases involving chronic or fatal illnesses. Trust administrators must work with creditors to settle these debts.
Tax duties. Trustees may have certain tax duties. For instance, the trustee is responsible for filing any tax returns and paying the taxes on the trust.
Investing. Under California's Prudent Investor Rule, trustees must responsibly invest any assets for the benefit of the beneficiaries. Trustees cannot make investments that endanger the trust.
Transfer assets from the trust. One of the responsibilities involved with trust administration is to transfer assets in the trust to the beneficiaries. This may include putting together a distribution plan or hiring an accountant.
Contacting beneficiaries. California trustees must notify the beneficiaries when taking over administration responsibilities required by the trust.
As the duties mentioned above imply, the trustee should be a responsible person with plenty of life or professional experience. Some people use a law firm to administer their trusts, as trust administration attorneys have the resources and experience to smoothly facilitate the process. Another major benefit of using a trust administration lawyer is that he or she can help if another party contests the terms of the trust. If for any reason some of the decedent's assets go through probate, an attorney can also be very helpful.
Davidson Estate Law can help you and your family with trust estate administration. You may contact our law firm to learn more about how we can help with your trust. For a consultation with one of our attorneys, call or use the contact us form on our website. We have offices in Oakland, Berkeley, San Francisco, Walnut Creek, San Jose, and San Mateo.