Trust Administration

Your Job As Trustee

Locate All Of The Important Documents

The first step is always to locate the trust document and all related estate planning documents. It is important to safeguard these documents, as they represent everyone’s legal rights and responsibilities as to the trust property. Indeed, any beneficiary of the trust may rightfully ask for a copy of the trust document. 

If the Estate Plan is found before the deceased has been laid to rest, be sure to look for any written funeral, cremation, burial, or memorial instructions. 

Just as importantly, be sure to obtain copies of the death certificate. The funeral home can often assist with this. You will need death certificates for many purposes, so be sure to obtain plenty of certificates. For some purposes, a photocopy of the original will do, but in many cases you will need an official, certified copy. 

Identify The Assets ‘inside’ And ‘Outside’ Of The Trust

You need to make a detailed list of all property that is held inside the Texas living revocable trust and identify the property that was left outside of the trust. 

As trustee, you are now akin to the ‘treasurer’ of the trust. You don’t personally own the trust property, but you are the custodian of the property, and your job is to gather and distribute the trust property to the beneficiaries of the trust in accordance with the terms of the trust document. 

Assets, including real estate, bank accounts, vehicles, and brokerage accounts were put into the revocable trust to make them easy to pass on to the trust’s beneficiaries. Your list must include all these deeds, bank accounts, retirement accounts, life insurance policies, investments, contracts, and business assets.

Separately, also make a list of the known liabilities, such as utilities, mortgages, credit cards, loans, hospital bills and funeral bills. Indeed, if the loved one’s records aren’t perfect, you may not find out about some debts and assets until months later, when all the statements have come in the mail, or creditors realize your loved one has died. 

As you begin to make your list, you may realize that some things are not in the trust which should be, and that those items will take special attention, and may even be a huge problem. For instance, your parents might easily have accidentally left certain real estate out of their trust. This may require a probate to get the property “back into the trust” so that it can be distributed in accordance with the terms of the trust document. 

Carefully Read The Trust Document

As Trustee, you must read every document in the Estate Plan carefully. Recognize that when all the original grantors passed away, the trust immediately became irrevocable. Even though you are now the Trustee, you cannot change it, and you are legally bound to its provisions. The trust document is essentially a set of written instructions that spells out exactly how to administer the trust. Keep some key questions in mind as you read: 

• Are there special instructions regarding the loved one’s funeral, cremation, or burial?
• Who gets the loved one’s personal effects? 
• Who gets any specific bequests? 
• Who gets the loved one’s residuary trust? 

Pay Outstanding Debts And Liabilities

Yes, the bills of someone who has passed away must be paid. The estate owes this money, not you, but all those debts must be settled before there can be a distribution of anything to yourself or the other beneficiaries. 

This is also the time that you, as the Successor Trustee, will need to evaluate whether trust assets, such as real estate or a business, should be sold. This is your sole decision as Trustee, and often it’s the best way of creating an equitable distribution for multiple heirs—though again, you should seek professional advice. 

The Trustee is also responsible for paying the ongoing expenses of administering the trust, such as legal fees or accounting fees. Then there are ongoing expenses like utilities, insurance premiums, mortgage payments, and homeowner or condominium association fees. In many cases, you may draw a small stipend from the estate for the work you are doing in all this, and of course the estate should pay administrative expenses. But proceed with great caution in this area, and again seek professional advice, as you do not want to trigger questions from other beneficiaries or create liability for yourself. 

As Trustee, you are also responsible for filing your loved one’s final tax return. Also, if the estate earns any income at all after their death, you may need to file a separate tax return on behalf of

the Estate. Absolutely do not try to file these returns without the professional help of a qualified CPA. 

Meet With An Austin Trust Administration Attorney 

Not only will you spare yourself enormous hassles and errors, but working with an attorney will greatly reduce your personal liability as the Successor Trustee. Although a trust can avoid probate, there are certain legal documents that must be drawn up related to the administration of a trust after the death of the grantor. 

Distribute The Remaining Assets To The Beneficiaries

After assets have been gathered and debts have been settled, the trustee is in a position to distribute trust income or property to trust beneficiaries, including possibly yourself, strictly according to the terms of the trust. Distributing the estate assets can be a lot of work. You need to have a clear accounting available for all the beneficiaries. You will need to complete transfer deeds and other change-of-title documentation. You will need to work closely with each financial institution involved. 

If you are the successor trustee of this trust, you will need to retain legal counsel to guide you through the trust administration process and protect you from potential personal liability. The Daves Law Firm helps trustees in Austin, Texas and the surrounding areas administer trusts effectively and efficiently. If you need assistance with trust administration, contact the Daves Law Firm today.