What is a trust administration?
Trust administration is really the process of settling a trust. So somebody created a trust with an estate planning attorney in San Diego at some point in time, that someone is no longer with us, and it’s the process of what happens next. Now, there’s a common misconception out there that because trust administrations aren’t done in probate court, and they’re handled privately, that help from an trust administration attorney in San Diego isn’t really needed, and you can go it on your own, and I cannot urge you enough if you’re the in the position of successor trustee. You’re the person that’s taking over for someone else which means you really ought to seek help from a trust administration lawyer in San Diego from the outset to help guide you through the process.
The reason being is you want to make sure that, number one, you’re doing the right thing. Number two, you’re releasing liability from yourself along the way, and that number three, we don’t miss any tax implications or tax advantage ways of doing things along the way as well.
Now the specific steps for any trust administration will partially depend on what the trust itself says, but there are some basic principles for just about every trust administration, and as some base steps, the first is going to start with notice. Telling all of the right people that the trust maker, or the creator of the trust, has passed away, the trust is irrevocable and that we intend to administer it according to the terms and that’ll start a narrow window for them to express any concerns or forever hold their peace.
The next step is marshaling assets or getting everything that the trust owns together so that we can distribute. After we’ve got everything together, it’s following the wishes in the trust. So if that means making distributions outright, that’s what we do. Or if someone has a sub-trust we will get that trust set up and funded with the right proportion or amount.
After we’ve done that, the next step is to account to everybody for everything that we’ve done, so we provide them with an accounting down to the penny. What’s come into the trust, what paid out of the trust, and what distributions were made. At the end of the process or towards the end of the process, we’re either going to file a final tax return and wrap up the trust administration, or if the trust dictates, we will set everything up for a continued administrative process. Again, the specifics around your steps for your trust administration process will depend on how the actual trust is set up.
If you find yourself in the position of successor trustee and you have any questions around how to start the Trust administration process, or maybe you’re midway through and you just need some guidance, always feel free to reach out. Give us a call. Send us an email. Send us a text, we’re here and we’re always happy to answer any questions.
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