Orange County Estate Planning Lawyer Blog
I was just put in charge of a trust so what do I do?
Trust Administration Basics for Newly Appointed Trustees
Events triggering administration. Trust administration is needed when or both of the Trustors (i.e. persons who created the trust) passes away or resigns voluntarily or becomes legally incompetent.
Basic responsibilities
The trust documentation must be consulted for exact instructions pertaining to the trust involved but most trusts typically involve the following steps.
| BASIC STEPS | PURPOSE/EXPLANATION |
| ♦ Authorize successor Trustee | Appropriate paperwork will need to be done to establish who is the successor trustee and to authorize the successor trustee to act on behalf of the trust and its accounts and properties. |
| ♦ Notifications & certificates | Original death certificates are needed and notices need to be sent as determined by what is in the trust. |
| ♦ Formal notice to beneficiaries | A formal notice in the form required by the California Probate Code must be sent to everyone mentioned in the trust. |
| ♦ New tax ID# & banking | A new tax ID# must be obtained from the IRS and some or all of the trust bank accounts will need the new ID# and new account signatures. |
| ♦ Inventory of assets | All accounts, personal property and real estate needs to be inventoried |
| ♦ Notify creditors & pay debts | All bills need to be paid and creditors notified |
| ♦ Insurance & Pension Plans | Notification of death and paperwork may be needed to get distributed. |
| ♦ Real estate titles | Documents need to be filed with the county recorder because of the death and the property tax situation considered |
| ♦ Business & investment changes | If the trust owns a business or shares in some type of investment involving other owners then various documentation will need to be done. |
| ♦ Appraisals | Appraisals of all real estate and valuable personal property are needed. |
| ♦ Trust allocations & reports to IRS | If the trust has assets from a husband and wife various accounting and allocations/reports to the IRS may be needed |
| ♦ Property taxation issues | Determine property tax effects of the death on each parcel of real estate and consider options depending upon how property is to be disposed of. |
| ♦ Income, estate and gift tax returns | Income tax returns for the trust and for the deceased person need to be filed as well as possibly estate and gift tax returns. |
| ♦ Accounting & distributions | Trust law requires a detailed formal accounting at least annually to all beneficiaries unless it is waived. After the final accounting, if there are no objections to the accounting, the trust estate is distributed to the beneficiaries according to the instructions in the trust. |
