Trust can effectively protect your assets from creditors, avoid the probate process, and potentially decrease your tax liability. However, trust administration can be complex. Suppose you have been named as a successor trustee. In that case, you have a legal obligation to manage the assets and property the trust owns for the benefit of the beneficiary or beneficiaries.
Many of us lead busy lives and may need help understanding the requirements and obligations of trust administration. Have you been named as a trustee in Mississippi? If so, working with an attorney can help you fulfill your legal obligations and protect yourself legally and financially. The attorneys at Palmer & Slay, PLLC are here to help. We can answer any questions, help you fulfill your legal obligations, and even assist you with administering the trust effectively. Contact the estate planning attorneys at Palmer & Slay, PLLC to learn more.
What Is Trust Administration?
Trusts have become increasingly popular estate planning tools. Many estate planners have used one or more trusts as part of their comprehensive estate plans. When a loved one or friend passes away, and they have a trust, a successor trustee will need to take over and begin administering the trust. For example, a married couple may create a trust and appoint themselves as trustees during their lifetime. The person who creates the trust is called the grantor. The trustees manage the trust, and the beneficiaries ultimately receive the trust’s assets.
The grantors can appoint a successor trustee who will take over the trust management when they pass away. The successor trustee must understand what happens after the death of the person who created the trust. Although the probate process can be avoided through a trust, the transfer of assets through the trust isn’t automatic.
There are administrative duties and expenses required during the trust administration process. Each trust has its trust agreement with unique terms. as a result. There are often unique considerations and tasks that need to be analyzed and handled as part of the trust administration process.
What Does Trust Administration Include?
Trust administration involves the comprehensive management and oversight of a trust’s assets, ensuring proper distribution to beneficiaries according to the trust’s terms. This process includes a range of responsibilities such as maintaining accurate records, handling tax filings, and managing investments. It also entails legal obligations to act in the best interest of the beneficiaries and adhere to the specific guidelines outlined in the trust document. Effective trust administration is crucial for preserving the trust’s assets, minimizing legal and financial risks, and ensuring the trust fulfills its intended purpose.
Legal Obligations of Trustees
Successor trustees have a legal obligation, also called a fiduciary duty, to manage the property and assets owned by the trust. Trustees are required to follow the guidelines outlined in the trust agreement. As a fiduciary agent, the trustee must keep all the details related to the accounting of trust assets, settle debts, and pay any taxes required of the trust. When a trustee fails to use reasonable care as the fiduciary agent, he or she can be held personally accountable, even if the failure was not intentional. After the assets and liabilities of the trust have been settled, the trustee can begin making disbursements to the beneficiaries. Once the disbursements have been made, the trust may be terminated, depending on the terms of the trust agreement.
Trust Administration Services We Handle
As mentioned above, the trust administration can be complex and require the successor trustee to complete many different tasks. The estate planning attorneys at Palmer & Slay, PLLC provide full-service legal representation related to trust administration. We offer our clients excellent legal counsel and assistance engaging in the following types of trust administration procedures:
- Notifying beneficiaries of the grantor’s death
- Obtaining an IRS Tax ID Number for the trust and any sub-trusts
- Filing a death tax return
- Filing a final income tax return for the decedent
- Filing a trust income tax return every year as long as the trust is held open
- Publishing legal notice in a local newspaper regarding the grantor’s death
- Gathering the assets together
- Protecting the trust assets
- Opening a bank account for the trust
- Paying the grantor’s financial and last expenses
- Collecting life insurance policy proceeds
- Determining if formal probate should be opened with the court for any assets not owned by the trust
- Notifying all financial institutions of the grantor’s death and that they are the successor trustee
- Notifying the Department of Health Services and Veterans Affairs, and any other relevant health agencies of the grantor’s death
- Determining the beneficiary status of the grantor’s retirement accounts, such as 401K(s) and IRAs
- Obtaining fair market valuations of any property owned by the trust
- Determining whether the estate tax is due
- Paying off the grantor’s debts using the trust’s assets
- Paying ongoing legal and CPA expenses for the trust
- When necessary, liquidating assets to pay off the grantor’s death
- Investing trust assets in a safe and prudent manner
- Distributing trust assets to beneficiaries according to the trust agreement terms
The Benefits of Working with a Trust Administration Attorney
The trust administration process can be challenging. Working with an attorney can help you properly oversee trust administration. An attorney can also minimize any issues that may arise between the trust’s beneficiaries and other family members. Working with an attorney also protects trustees from any potential claims brought against them, such as a breach of fiduciary duty. When an experienced attorney helps the trustee manage the assets in the trust, he or she is less likely to fail to act as a fiduciary agent and be held liable for any issues that arise.
Third-Party Trust Administration Services
The attorneys at Palmer & Slay, PLLC also offer third-party trust administration. You may have worked with another attorney to create the trust, but the situation has changed, and you’d like a different attorney to help you with trust administration. We are here to help you and provide clients with a free consultation so you can better understand if we are the right fit for you. Additionally, we help clients with trust administration when a licensed attorney did not create the original trust documents. Finally, we represent clients in litigation related to trust administration.
Contact an Experienced Trust Administration Attorney in Mississippi
If you’ve been appointed as a trustee for your loved one’s trust, the attorneys at Palmer & Slay, PLLC are here to help. We also help clients new to estate planning and would like to create a trust or those with concerns about trust litigation or trustee. Contact Palmer & Slay, PLLC today to schedule a free case evaluation and learn more about how we can help you.
Palmer & Slay, PLLC, is dedicated to assisting clients with their trust administration needs in Mississippi, including Scott County, Rankin County, Brandon, and beyond.