A Trust is a rule book for handling assets, and Trust Administration occurs when the rules are put into action. Trust Administration begins with an event that triggers a provision in your estate plan, such as incapacity or death. The plan becomes executory, meaning that the individuals you designated in your plan documents must step into action and execute according to your instructions. To put it simply, the duties of a Trustee are considered to be the collection, management, investment, and distribution of trust assets. During that process it is also important to keep detailed records. The principal source of Trustee powers and duties is the trust agreement itself, so it is important for the Trustee to be familiar with the terms of the trust.
Another important set of duties of the Trustee relates to tax matters. Depending on the situation, often times it is necessary to prepare a Federal Estate Tax Return (706), and possibly a Fiduciary Tax Return. It is always necessary to prepare an Income Tax Return (1041). Rhonda will be able to assist with all of the tax matters for the estate. She recommends all Trustees meet with her to determine if and when a tax return is necessary.
If someone exceeds their Trustee powers, they may be held liable for loss or damages to the trust estate. A Trustee must carry out all Trustee activities personally; however, they may hire lawyers, accountants, investment advisors, and others to consult with concerning the administration of the trust. Such advisors are usually paid through the assets of the trust, so there is normally no out of pocket costs to the Trustee. Sometimes the Trustee can be paid, it depends on the terms of the trust. Usually, the Trustee can reimburse himself/herself for out of pocket costs.
The Trust Administration process carries a lot of responsibilities. We will help guide your loved ones through the process with sensitivity and patience, working to make the process as straightforward and as efficient as possible. For example, the Trustee is responsible for paying the taxes and paying any additional taxes. It does not matter if all of the money is distributed to the beneficiaries.
Another issue during Trust Administration is dealing with creditors. What should be done? The answer is not so simple. There is a reason each debt of the decedent is sometimes sent to collections.
What is the attorney’s role in estate administration? Rhonda makes sure you are comfortable administering the estate. It is important that you understand the trust and understand that as the Trustee you have a fiduciary duty to the beneficiary. A fiduciary duty means that you have a relationship of special confidence and you need to treat the beneficiary like you would treat yourself.
Rhonda has been helping families in Fairfax establish trusts for more than 20 years. She offers the following Trust Administration services:
The Trust Administration process carries a lot of responsibilities. As an experienced trust attorney in Fairfax, Rhonda will help guide your loved ones through the process with sensitivity and patience, and work to make the process as straightforward and as efficient as possible. Call 703-442-3890 today or contact her online to set up a consultation.