Trust administration is undertaken when the person who created the trust, the "settlor," dies leaving a trust document. Typically, a settlor creates a revocable trust to set forth the particulars of how and when assets should be distributed or if those assets should be held in further trust for the benefit of others. The person named to handle the administration is the "trustee" and is usually a family member or trusted friend. On the surface, trusts are fairly simple and straightforward to administer. They include useful structure to control assets and are generally administered privately, without probate or other court intervention; and they can serve as a useful roadmap for the trustee to manage trust assets.

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The best trusts include thorough and practically designed language so that the trustee has guidance if an issue arises. Those issues could relate to confusion on the part of the trustee or bickering among beneficiaries. When an attorney can assist in this process interests are better protected and efficient administration can result.

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Every situation is different, but our services typically include the following:

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a)   Prepare and complete a trust certification, acceptance of office, and other documentation for third parties to explain that the client is the Trustee or Co-Trustee (following the death of the Trustor or Settlor). That documentation should assist the Trustee in collecting the assets of the trust or changing the identity of the Trustee on existing trust accounts.

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b)   If required by local law, prepare and serve a notification to the persons entitled to it (e.g., heirs and beneficiaries) to notify them of the Trustor’s or Settlor’s death, their entitlement to the trust terms and/or the statute of limitations for filing a trust contest.

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c)   Assist the client in determining if a probate (or another court proceeding to transfer title of assets held in the name of a deceased Trustor or Settlor) will be required.

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d)   Assist the client in preparing a complete inventory of the trust assets, and additional assets that may be passing outside of the trust (such as life insurance, retirement benefits, and other assets), that may also be transferred or paid to the trust as a result of the death of the Settlor or Trustor.

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e)   Help the client make a thorough search for all debts, obligations, and contingent liabilities of the decedent in order to determine the financial condition of the trust estate and advise the client regarding other action that must be taken by the client to secure, reinvest, or protect the assets and provide for the discharge of liabilities.

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f)   Prepare and complete such interim accounts and reports to the beneficiaries as may be necessary or advisable during the course of administration of the trust estate.

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g)   Decide whether the lawyer or accountant will prepare tax returns required to be filed for the Trustor, Settlor or trust or whether the responsibility for the preparation of those tax returns will be shared. These tax returns include federal estate tax and generation-skipping transfer tax returns, any state inheritance tax return, any local or state property tax returns or reports, the basis reporting Form 8971, as well as federal and state fiduciary income tax 87 returns, and a final income tax return for the deceased Trustor or Settlor.

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h)   Review and consider with the client any post-death planning, such as alternative asset valuation options, use of disclaimers, funding of gifts and subtrusts as provided for in the trust, timing the distribution of assets in a way that is beneficial to the trust and beneficiaries, and election of income tax benefits for the trust and beneficiaries.

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i)    Plan for the payment of all death taxes and the source of funds to be used in payment of any tax obligations, along with installment payments of taxes, if available.

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j)    Prepare a plan of distribution of assets held in the trust, either outright or to separate continuing trusts for the beneficiaries. As part of the plan of distribution, particular attention must be paid to the disposition of tax-favored retirement accounts (IRAs, etc.), as strict deadlines apply.

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k)   Prepare all reports, consents, receipts, and accountings for closing the master trust and releasing the client as Trustee.

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l)    Counsel and advise on any related questions or matters arising out of the administration of the trust.

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Unfortunately, disputes of varying kinds over Wills and Trusts occur with a fair amount of frequency. Often, with expert legal advice and associated thoughtful communication and negotiation, these disputes can be resolved amicably. Sometimes, it takes little time and effort; other times it requires more time and effort, and perhaps a collaborator mediation of the parties; and still other times, resolution is only possible when the matter is litigated. In any event, it is wise to obtain careful legal advice from the outset to evaluate the issues, applicable law and potential avenues toward efficient resolution.