When a love one dies, and they have a trust, the successor trustee must undertake the process of trust administration.
The trust administration process is often complex and confusing. Many individuals who have been named as successor trustee, have little or no experience in executing the appropriate steps necessary to administer a trust.
Often times it is necessary or desirable to retain the services of an attorney familiar with trust administration to make it easier for the trustee and the family to settle the trust. At Fletcher Law, we prepare the necessary documents to simplify the process and give the successor trustee peace of mind throughout the administration.
What does a Successor Trustee do?
There is no one set of items every trustee is responsible for because every estate is different due to the type of assets, ages of the beneficiaries or the instructions left in the trust.
However, there are some things that most Successor Trustees will do in their capacity as Trustee. Below are a few examples:
- 1. Notifying trust beneficiaries and heirs at law of the death of the Grantor;
- 2. Obtaining an IRS Tax ID Number for the trust;
- 3. Filing a final income tax return for the decedent;
- 4. Possibly filing a death tax return;
- 5. Filing a trust income tax return annually for as long as the trust is held open;
- 6. Publishing a legal notice in a local newspaper regarding the death of the Grantor of the trust;
- 7. Marshalling all of the assets together and protecting the trust assets;
- 8. Opening a bank account for the trust;
- 9. Paying financial and last expenses of the decedent;
- 10. Collecting life insurance policy proceeds;
- 11. Determining if a formal probate needs to be opened with the court for any assets not titled in the trust;
- 12. Notifying all banks and financial institutions of the death and that they are the nominated Successor Trustee;
- 13. Notifying the V.A. (if applicable) and Department of Health Services of the death;
- 14. Determining Beneficiary status of all the decedent’s retirement accounts. For most 401Ks and IRAs, a stretch out is available for the beneficiary if the proper steps are taken.
- 15. Obtaining valuations on all property as of the date of death of the decedent including real estate and business interests;
- 16. Determining if an estate tax is due at the federal or state level on the decedent’s Estate;
- 17. Paying off all of the debts of the Grantor of the trust from the assets of the trust;
- 18. Paying ongoing expenses of trust administration such as legal and CPA expenses, etc.;
- 19. Liquidating assets where necessary to pay off the debts of the Grantor;
- 20. Investing assets of the trust in a safe and prudent manner during trust administration;
- 21. Distributing the trust assets to the beneficiaries after all of the above has been completed.