Trust Administration

When a person who created a revocable trust during their lifetime passes away, the trust assets must be “administered” properly transferred to the beneficiaries named in the trust. After death, the individual is referred to as the “decedent,” and the trust generally becomes irrevocable, meaning it usually cannot be amended or revoked. However, judicial exceptions may apply, and the trust itself may contain exceptions. If you need help with trust administration, please call us today to schedule a consultation with Alyssa Shorstein, our experienced trust administration lawyer in St. Johns County, Florida.

General Steps of Trust Administration

The trust administration process varies based on the trust’s assets and beneficiaries, but certain general steps typically apply, as summarized below.

Step One: Information Gathering & Notifications. The trustee will need to gather all original estate planning documents including copies of all trusts and amendments to the trusts along with the Last Will and Testament, which is usually a pour over will, as well as certified copies of death certificates. The trustee will then need to review all of the documents to determine who the beneficiaries are and what the trustee’s duties are for administration and distribution of the trust assets. The trustee will sign an acceptance of trusteeship with the information as required by Florida Statutes 736.0813(1)(a), sign a certification of trust, and file a Notice of Trust in the county where the decedent last resided, as well as apply for an EIN (tax identification number from IRS.gov for the trust.

Step Two: Asset Gathering & Management. The trustee will need to determine what assets the trust owns and if there are any assets that need to be transferred to the trust by pay on death transfers, a probate administration, etc. It is the Trustee’s responsibility to maintain and preserve the trust assets as a prudent person would for the best interests of the beneficiaries. How the assets are maintained will depend on what kind of assets there are. For example, cash assets can be kept in accounts such as checking, savings, money market, brokerage, etc. If the trust estate contains real estate, then the real estate must be properly titled in the trust name, maintained, and appraised. Any information regarding debts that the decedent still owes will also need to be gathered and insurance policies on assets reviewed. The Trustee will need to contact an accountant about which documents and filings will need to be made in that situation and then will need to work with said accountant to provide the required documents for any necessary tax filings. Once the assets are identified that Trustee will prepare and provide to the beneficiaries a trust inventory.

Step Three: Distribution & Closing. Before any distributions are made, all debts and taxes owed must be paid. The trustee prepares an accounting and provides it to the beneficiaries, along with a proposed distribution plan and any waiver and receipt forms for beneficiaries who choose to sign them. Beneficiaries may also waive the accounting. Depending on the trust terms and circumstances, such as a beneficiary’s age, distributions may be made all at once or in stages. Assets that are to be distributed outright are transferred to the beneficiaries, while assets that must remain in trust until a certain event or age are held and managed by the trustee until that time. While assets remain in trust, the trustee must keep records available to beneficiaries upon reasonable request and continue to provide annual accountings. Once all assets have been distributed, all required notices have been provided, and any applicable receipts and waivers have been received, and the trust administration can be closed.

For guidance through the trust administration process, please call our experience trust administration lawyer in St. Johns County, Alyssa Shorstein, today for a consultation.

Trustee Fiduciary Duties

Trustees have significant responsibilities and may face liability if they do not meet them. They must comply with their fiduciary duties, including the duty of loyalty, duty of care, duty to inform and account, duty of impartiality and to avoid conflicts of interest, and more. A trustee should understand the role and take these obligations seriously. If a trustee cannot fulfill these responsibilities, they may resign. If the trust terms allow, the trustee may appoint a successor; otherwise, a successor trustee named in the trust may assume responsibility for administration. If a trustee breaches their fiduciary duties, a court proceeding may be filed to remove the trustee and, if losses resulted from the trustee’s conduct, hold the trustee liable.

We Can Help

This information provides only a basic overview of trust administration. Many additional issues may arise depending on the type of trust, the assets involved, and the beneficiaries. For example, trusts involving special needs beneficiaries may require careful planning before distributions are made. Our experienced trust administration attorney in St. Johns County can guide you through the process. Call us today at (904) 829-3035 to schedule a consultation.