The attorneys at the Law Offices of Karen Knutson are experienced in the formation of Trusts and representing Trustees in the administration of Trusts, including:
- Revocable living Trusts (individual and family Trusts)
- AB and ABC "credit shelter" Trusts
- Special Needs Trusts
- Testamentary Trusts
A common misconception about living Trusts is that a living Trust will avoid all of the responsibilities and expenses of post-death administration and that it will eliminate the need for an administration of a decedent's estate. The administration of the Trust and Trust assets is not automatic, though it the administration of a Trust is often more efficient and less expensive than the administration of a decedent’s estate through a formal probate of a Will or formal probate of a decedent dying without a Will or Trust. Having a Trust may result in avoiding a formal court supervised probate, but Trust administration still requires many of the same tasks and duties, as well as reporting to beneficiaries and other interested parties.
A common type of living Trust is a Trust created together by two spouses, often referred to as a family Trust. Many individuals, including the surviving spouse of the deceased Trustor, do not realize that the Trust needs to be administered after the first spouse dies and again after the second spouse dies. A Trustee has many duties and responsibilities to the Trust beneficiaries and to third parties with an interest in the Trust, such as possible creditors, taxing authorities, and other government agencies. A Trustee has personal liability to Trust beneficiaries and interested parties for breaches of Trust, even if the Trustee’s breach was unintentional or is based on an action that was taken in good faith.
Our goal in representing a Trustee is to educate him or her regarding his or her duties under the terms of the Trust and under the law, and to assist him or her through the process in a way that protects the Trustee from liability and assists him/her to conduct the Trust administration as efficiently and quickly as is possible.
There are tasks that require immediate attention upon the death of the grantor and there are ongoing responsibilities required of the Trustee during the existence of the Trust. The ongoing assistance of an attorney and other professionals is often required. The difficulty or ease of administrating a Trust depends on many factors, including the type of assets held by Trust, the dispositive terms of the Trust (the manner in which Trust assets are gifted to beneficiaries), and the Trustee’s experience.
Examples of the types of duties we assist our Trustee clients with and/or provide counsel regarding:
- Identifying, collecting and valuing Trust assets
- Changing title to assets to reflect the change in Trustee
- Dealing with assets not placed in the Trust
- Completing legal recording requirements and notices to government agencies regarding change in ownership of real property, if applicable
- Sending required notices to beneficiaries
- Notification to potential creditors
- Pay debts and taxes (if applicable)
- Hiring a certified public accountant (CPA) and/or bookkeeper to assist with accountings
- Hiring a tax professional to assist with the preparation and filing of the decedent’s final income tax returns; the Trustee’s fiduciary income tax returns; and Federal estate tax returns (if required)
- Assist with the preparation of accountings to beneficiaries
- Plan for allocation of assets to subtrusts, if any, and plan for distribution of assets to beneficiaries
- Setting up subtrusts, if required
- Sale of Trust assets, including real property, and sending related notices to beneficiaries
- Distributing assets to beneficiaries, including facilitating negotiations when necessary
- Obtaining receipts on distribution to beneficiaries
- Issues may arise during the Trust administration that require applying to the Court for certain orders or instructions. In those circumstances, we assist our client with the preparation and filing of the appropriate petitions, including:
- Heggstad Petitions
- Petitions for Modification of Irrevocable Trusts
- Petition for Instructions
Please call (310)392-9677 or e-mail the Law Offices of Karen Knutson for a consultation with one of our experienced Trust administration lawyers regarding your Trust administration matter.