Trust administration begins when a trust is created and funded. While many people believe that a trust administration only begins upon the death of the trust maker, ensuring that all trust remain properly titled in the name of the trust is crucial for a smooth administration once the trust maker passes away. Proper administration of a trust during and after the trust maker's lifetime is necessary for that person's desires to be fulfilled. A properly funded trust provides one of the most efficient vehicles for holding and passing assets without the need for expensive and time consuming court involvement.
Post-mortem trust administration begins upon the trust maker's death. The importance of proper trust administration cannot be overstated. Whether to ensure that estate taxes are minimized, portability is preserved, or that the affairs of the trust maker are completed in order to distribute trust property to beneficiaries, a timely and properly executed trust administration is required. In order to minimize the trustee's liability, marshal all trust assets, and meet all legal requirements, an attorney with experience administering trusts should be consulted.
Upon the death of the trust maker, the trust administration may include:
- Attorney review of the estate planning documents, to determine the requisite steps to ensure that estate taxes are minimized, portability is preserved, and that all legal requirements are met;
- Creating an inventory of all assets that will pass both through and outside of the trust;
- Determining date of death values of all assets;
- Determining all debts of the deceased trust maker;
- Ensuring that all assets are secured, protected, and accounted for;
- Payment of debts and other administrative expenses;
- Filing state and federal tax returns;
- Allocating assets to subtrusts, exercising any disclaimers, and ensuring that assets will be allocated pursuant to the trust maker's wishes;
- Marshalling or gaining control over all of the deceased trust maker's assets;
- Transferring property to various Trusts and beneficiaries;
- Making appropriate trust distributions;
- Ensuring that the Trustee is acting in accordance with California law, which includes the California Uniform Principal and Income Act;
- Preparation of Accountings; &
- Completing the final trust distributions.