Comprehensive estate planning includes trusts. These valuable instruments allow individuals to, among other goals, minimize their estate taxes, avoid the expensive and time-consuming probate process, and provide financial support to their loved ones. However, creating and managing a trust are two separate matters. A trustee is required by law to administer the trust in accordance with its terms and all applicable laws. If they fail to do so, they can be held liable for breaching their fiduciary duties and potentially be required to pay legal damages.
This is where having a third-party trust administration attorney can help. Palmer & Slay is dedicated to serving the needs of trustees who want assistance in managing trusts and complying with their legal obligations in doing so. Learn more about how we can counsel and represent you.
The Basics of Trust Administration
When an individual (known as a settlor or grantor) establishes a trust, they fund it by transferring assets into it. This property must be managed by a reliable person known as a trustee, who serves in a fiduciary role. A fiduciary is someone who is obligated to put the interests of others before their own by acting with diligence and care. More specifically, the trustee is required to act in the interests of the trust’s beneficiaries.
As an example, a parent may establish a trust to provide funds for the benefit of their minor child. If the parent passes away, the person who is named as the trustee will be required to administer the trust according to its instructions. The trustee is given some latitude to make certain decisions, but ultimately those decisions must benefit the minor child. Problems often arise when the trustee is accused of not acting in the interests of the trust’s beneficiaries.
Every trust is different, so the exact duties of the trustee will vary from one to another. While the terms of the trust will largely dictate the trustee’s responsibilities, so too will the law. In other words, the trustee must carry out their duties with an understanding of what the trust’s instructions are, how they apply to the assets that are held in the trust, and what the law requires. A third-party trust administration attorney may be called upon to assist with this challenging position.
What Does A Trust Administration Lawyer Do?
Administering a trust can be difficult because so much is expected of the trustee. There are investment, record-keeping, and tax filing obligations, among others. All of these must be met with an eye towards preserving trust assets, avoiding waste, mitigating financial and legal risks, and serving the interests of beneficiaries.
If you are serving as a trustee, it is imperative that you abide by your duties as carefully as possible to avoid allegations that you have committed a breach. We can assist you by handling the following, among other tasks:
- Providing notice: After the settlor dies, various individuals have the right to be notified. For instance, trust beneficiaries need to be informed. Financial and government institutions will also have to be notified. The settlor’s estate in general could be the subject of creditor claims, so notice of the death must be published in local newspapers. We handle any and all notice requirements concerning the passing of the settlor.
- Filing and paying taxes: Trusts are required to file income tax returns since they are legal entities separate and apart from the settlor. Our firm can begin the process by obtaining a tax identification number and handling all required state and federal tax returns. Moreover, we can assist with filing the decedent’s final personal income tax return.
- Inventorying and protecting trust assets: Part of a trustee’s duties is to take reasonable steps to safeguard trust assets. These may include both intangible assets like bank accounts along with real and personal property. We will make sure trust properties are organized, inventoried, and protected so you don’t risk wasting these valuable assets.
- Opening and managing bank accounts: We can assist with opening and managing any bank accounts connected to the trust. This includes working closely with financial institutions and providing them the necessary paperwork (e.g. death certificates) that will allow you, as trustee, to access and use trust assets.
- Making wise and prudent investments: The trustee is obligated to make financially sound investment decisions using the trust’s assets. Doing so requires balancing such variables as the beneficiaries’ needs, their risk tolerances, and the long-term objectives of the trust. We will take steps to ensure that you meet these duties while avoiding excessively risky investments.
- Making trust distributions: Trustees distribute trust assets to beneficiaries in accordance with the instructions that are given in the trust. Some distributions are designed to meet a specific purpose like providing for a beneficiary’s education, while others are based on a condition (such as the beneficiary reaching a certain age). Regardless of how distributions are to be made, we will handle them.
- Keeping records: To protect the integrity of the trust and ensure transparency in all decisions that affect it, the trustee should keep accurate and detailed records. Among these are bank and investment statements, tax filings, invoices, receipts, and much more. When record-keeping is done properly, there is much less of a risk that a beneficiary will accuse you of mismanagement.
Why Hire Palmer & Slay?
Our dedicated third-party trust administration attorney can assist with the above duties and others by leveraging our considerable estate planning experience for your benefit. We understand a fiduciary’s legal duties and what must be done to abide by them. We also appreciate that sometimes a trustee must adapt to changing circumstances to ensure that they properly exercise their responsibilities. For instance, if a certain investment is underperforming, it may need to be sold to avoid wasting trust funds. Administering trust is an active process, not a passive one, so we approach this task with the seriousness it deserves.
Contact Our Brandon & Rankin County Third-Party Trust Administration Attorney
Throughout our representation, we will act with professionalism while addressing questions and concerns you may have and actively supporting your role as the trustee. Our overall objective is to ensure you carry out your duties responsibly while following the trust’s instructions and all applicable laws. Give Palmer & Slay a call to get started now.
Palmer & Slay, PLLC, assists clients within Mississippi, including Scott County, Rankin County, Brandon, Flowood, East Jackson, and beyond.