Many individuals want to avoid probate, and therefore they create a trust and appoint a family member to handle their estate upon their death. However, many of the family members who are appointed have no idea how to handle a trust administration and fail to properly administer the estate causing anxiety on the part of beneficiaries and, at times, even causing litigation.
A trustee must administer a trust in good faith, and solely in the interests of the beneficiaries. First thing a trustee should do upon being appointed is to contact an attorney to ensure that all legal requirements of the trustee are met. As a trustee, you will need to execute an Acceptance of Trustee and a Certificate of Trust showing your appointment as trustee.
After officially becoming the trustee, you will need to file a Notice of Trust with the Court and send a Notice of Administration by certified mail to beneficiaries with a W-9 form. The beneficiaries may sign a waiver indicating the Notice of Administration does not need to be served upon them. The trustee must provide a complete copy of the trust instrument to any qualified beneficiary who requests a copy.
In addition, you will need to obtain a tax identification number so you can open up a bank account and transfer any assets from the decedent’s name to your name as trustee, and you must file tax returns on behalf of the trust.
Within ninety (90) days from the date of the Notice of Administration, you are required to serve a Trust Inventory on the beneficiaries as they have a right to know what the trust assets are. After the expenses have been paid, and you are ready to distribute to the beneficiaries, you should send a Final Accounting with your plan of distribution. You can formally serve your accounting, or the beneficiaries can waive service. Once all assets have been distributed, the beneficiaries can sign a Receipt and Consent to Terminate Trust. When that is complete, your job as trustee is over. With the assistance of an attorney and CPA, the trust administration process goes much more smoothly.
At Mara Law, P.A. we are happy to represent you in the administration of trusts along with probate administration, estate planning, guardianship, Medicaid Longterm Care, and family law matters. Please visit our website at www.maralawpa.com and contact us at 386-672-8081.