After the passing of a loved one, family members must navigate various legal processes in order to settle the estate and ensure that all financial matters are appropriately resolved. When the estate involves a trust, distribution of property in that trust is done according to the terms of the document.
There are many steps involved in trust administration, and an experienced attorney can help facilitate the process. In order to safeguard your interests and the wishes of your loved one, you would be wise to secure legal guidance in order to avoid potential complications.
Requirements for the appropriate administration of a trust
Knowing what to expect during the administration of a trust can alleviate stress and provide peace of mind for you and your family. The following steps are required in order to ensure proper administration of a trust:
- Step one: Proper notice must be sent to all trust beneficiaries and heirs of the estate. Beneficiaries have 120 days to file a contest or forfeit their right to do so. The notification must contain important information regarding the details of the trust.
- Step two: This step deals with the real property included in the estate, and a series of steps will ensure a full accounting of all assets, as well as ensure that the title is transferred to the appropriate beneficiary.
- Step three: This step requires the identification of all other trust assets, such as financial accounts, and the transferal into the successor's name. It is necessary to obtain a federal tax identification number for proper reporting to the IRS. After this, it is wise to make an inventory of these assets, as well as seek an appraisal for assets that do not have an assigned value.
- Step four: It is the obligation of the trustee to pay any remaining debts and tax liabilities. If the estate is large enough, there may be estate taxes in addition to income taxes.
- Step five: California probate law requires that the trustee administering an irrevocable trust present an accounting of all steps taken during the administration process, including expenses paid, deposits and disbursements.
- Step six: After the successful completion of the first five steps, designated beneficiaries receive the remaining assets.
The trust administration process is complex and confusing and may be delayed or further complicated when difficult emotions or disputes between beneficiaries arise. You should not attempt to navigate this process alone, but you should secure the assistance needed to help you avoid litigation and secure the assets to which you are entitled.