Trust Administration: Understanding Your Basic Duties As A Trustee
Trust administration involves following the instructions set forth by the trust’s creator – known as the “trustor” or “grantor” – in their trust agreement as to the trust’s assets. Generally, the trustee collects, manages, and invests trust assets. Accumulation and distribution of income will be under the guidelines within the trust.
The trustee may have duties such as:
- Preparing an annual accounting for the beneficiaries
- Filing income tax returns
- Managing trust investments in a “reasonably prudent” way as per the trust’s terms and under the Florida law
- Making distributions of income and principal to the trust beneficiaries in accordance with the terms of the trust
- Hiring outside financial consultants and other professionals for help with the administration of the trust
This list is not exhaustive, and the trust could include other duties. A trustee must follow the instructions of the trust. The law requires that they put the interests of the trusts before their own and carefully invest the funds, among other duties. If the trustee is not diligent or is found to be commingling trust funds with their own, the trustee can be held personally responsible to the beneficiaries for missteps.
Responsibilities Of The Trustee Or Successor Trustee When The Grantor Dies
The successor trustee must inform all of the trust’s beneficiaries and heirs of the grantor’s death and of the trust’s existence. Upon a beneficiary’s request, the successor trustee will need to send them a copy of the trust. The successor trustee may hire consultants for assistance with an accounting of the trust income and principals, creating a list of the decedent’s assets and determining the fair market value of the assets as of the decedent’s date of death.
There are many other duties the successor trustee must attend to promptly when the grantor of the trust dies such as:
- Filing of a “Notice of Trust” with the probate court
- Providing each qualified beneficiary with an accounting of trust assets
- Hiring appraisers to determine the cost basis of trust assets
- Establishing a trust checking account
- Paying administration expenses and claims
- Filing of federal and state tax returns
- Obtaining a taxpayer identification number, if necessary
- Allocating trust assets to beneficiaries or sub trusts, if applicable
Depending on the nature of the trust, there may be additional duties. If you are a trustee or successor trustee and have questions about the trust administration process, working with a knowledgeable trust administration lawyer is critical to ensure proper administration.
Speak With Premier Trust Administration Attorney Eric S. Kane
When you work with Eric S. Kane, P.L., you will work directly with Mr. Kane. He has the experience and knowledge needed to ensure that the multifaceted process of trust administration remains on track. He is highly respected among legal peers and former clients for his ability to streamline trust administration. Call his office in Aventura, at 305-937-7280. Mr. Kane also meets with clients in his Port St. Lucie office by appointment.