What is Involved in Trust Administration?
Following the death of a loved one who left behind a trust as a part of their estate plan, the process of trust administration will occur. The person named as trustee in the trust will be responsible for trust administration, however, having assistance from Raleigh trust administration attorneys can be invaluable. There are certain administrative duties involved in trust administration that family members may not fully understand. The successor trustee may need to do the following in order to successfully administer the trust:
- Set up a bank account in the name of the administrative trust to track expenses
- Obtain an IRS tax ID number for the trust
- File a final income tax return for the decedent and the trust
- Notify trust beneficiaries of the death of the grantor of the trust
- Pay all debts on behalf of the decedent
- Determine whether formal probate must be opened with the court for assets not included in the trust
- Notify banks and financial institutions of the death, providing successor trustee documentation
- Determine whether the estate tax is due on the decedent’s estate
- Distribute trust assets to beneficiaries
There may be many more considerations and tasks in more complex estates. Each estate and trust is unique, so things that might not occur in one trust administration could occur in another. It is important to have experienced Raleigh trust administration attorneys from NC Planning by your side throughout the process.
What Do Trust Administration Attorneys Do?
Trust administration is a necessary process that occurs after the death of the creator (grantor) of the trust. A named trustee is responsible for trust administration, which can be complex. Working with Raleigh trust administration attorneys from NC Planning can make the process much less daunting. Even if everything in the trust is clearly spelled out, each trust is different. An experienced NC Planning trust administration attorney can help you determine how much work will be involved, walking you through the list of tasks you will be expected to accomplish.
In addition to trust assets, certain other assets may avoid probate as well. As an example, life insurance and retirement accounts may pass directly to the beneficiary—unless they have been included in the trust. Regular bank, brokerage, or securities account assets may also pass directly to those named as payable on death or transfer on death beneficiaries.
North Carolina law provides that all current trust beneficiaries have the right to receive a copy of the trust document as well as a right to financial accountings and trust management records. The trustee must be proactive and responsive in providing these items. The successor trustee acts as a fiduciary. This means the successor trustee acts on behalf of another person, with a legal and ethical duty to place the best interests of that person (or their wishes as set forth in the trust) ahead of their own interests. The duty of a fiduciary is a legally enforceable one and can be significantly facilitated by a knowledgeable NC Planning trust administration attorney.
What Are the Benefits of Having Raleigh Trust Administration Attorneys?
Successfully administering a trust requires that the successor trustee understands and ensures compliance with all state and federal laws related to the trust. The successor trustee must also understand financial strategies and concepts. When a professional trust administration attorney is part of the equation, the possibility of a conflict of interest is greatly diminished. Trust administration attorneys have a clear understanding of the laws related to trust administration. The Raleigh trust administration attorneys from NC Planning can ensure legal compliance while prioritizing your wishes and your legacy.
What Are the Risks of Not Having a Trust Administration Attorney?
There are many problems that can potentially arise during trust administration. These problems could have an adverse impact on the inheritance of a beneficiary. When you don’t have a trust administration attorney to help navigate these “bumps,” adversity can result. Some issues that may arise during trust administration include:
- The successor trustee is accused of mismanagement of trust assets. If the allegations are true, the trust assets could be adversely affected.
- A breach of fiduciary duty occurs. A fiduciary duty is the highest duty under the law, requiring the successor trustee to act in the best interests of the beneficiaries as well as according to the trustee’s wishes. Should a trustee act to enrich himself, a breach of fiduciary duty has potentially occurred.
- The trust is challenged or contested. The cost of such a challenge could result in damage to the value of the assets and could require all beneficiaries to wait a long time to inherit. Should a trust be successfully contested, it could be declared invalid. It is worth noting that well-written trusts are typically much more difficult to challenge than a will.
Having a trust administration attorney by your side during the process can ensure that the trust is administered appropriately and in a timely manner.
What Are Some Common Issues Related to Trust Administration?
While trusts can offer many benefits, the successor trustee may run into certain issues when administering the trust. Many of these trust administration issues can be corrected by an experienced NC Planning trust administration attorney. Common issues include:
- Disputes regarding authority—A beneficiary may challenge the authority of the named successor trustee. If there are errors in the trust documents or the language is vague, the beneficiary may have a valid claim.
- A beneficiary demands their trust distribution—Trust documents should state the conditions under which the distributions to the beneficiaries will be made. That being said, the successor trustee may have a certain amount of discretion regarding asset distribution.
- Certain assets were not properly transferred to the trust. While the trust may provide clear instructions regarding the distribution of assets, if the assets were not properly transferred into the trust, problems can arise.
- If a trust contains outdated terms or provisions, the successor trustee may need to seek direction from the court.
- A named beneficiary could be deceased or incapacitated, requiring the trustee to seek direction from the court prior to proceeding with the administration of the trust if the trust agreement does not address this contingency.
Trust and estate laws can be complex and trust administration can be a complicated process. Having a highly-skilled NC Planning attorney to guide you through the trust administration process can be a huge benefit.
How NC Planning Will Help You Plan for the Road Ahead
The experience of our NC Planning team makes us highly efficient in trust administration tasks. We provide trusted services—in trust administration, estate planning, and business services—to those in the Raleigh, NC, and Cary, NC areas. Our legal team can review the trust, address your concerns, and walk you through the process, answering all your questions in a comprehensive manner. At NC Planning, we build strong client relationships from start to finish, always understanding your goals prior to making recommendations. We offer effective trust administration along with affordable, creative solutions to any issues you may have. Contact NC Planning today for a comprehensive consultation.
