You have been named successor trustee, now what? Duties in the administration of a trust

If you’ve been named a successor Trustee to a trust, all the duties can seem overwhelming. Here is a checklist of things you need to do to manage the trust.

1. Review the fiduciary documents.

The first step in managing a trust estate is locating and reviewing all planning documents for the decedent’s estate. Most estate plans include the Trust Agreement (sometimes called a Declaration of Trust), Transfer Will, Power of Attorney, Health Care Directives, and Living Will. Because the deceased passed away, the power of attorney, health care directive, and living will are no longer valid. You should carefully review the Trust Agreement to determine the identity of the Successor Trustee, the identities of all beneficiaries of the trust, and the distribution plan that the decedent intended. You should list the beneficiaries with their names, addresses, phone numbers, email addresses, age, and social security numbers.

2. Make the required presentations

A. File the original will with the probate court or the court clerk. Most states require that you present the will immediately or within a certain number of days after the death of the deceased. You will need to check with the county clerk or probate court to find out where to send the will.

B. File the death certificate in the county where the decedent or trust owned real property. This will remove the name of the deceased from the property tax lists and provide evidence of ownership if the property is to be sold.

C. Obtain the taxpayer identification number for the trust.

D. File a notice of trust with the probate court or the clerk of the court. Again, this may not be necessary in all states. The purpose of this notice is to notify the creditors of the decedent or other interested party that, although the decedent does not have an estate, there is an existing trust that must be administered. Most states, after the death of the decedent, completely cut off the claims of the grantor’s (deceased) unsecured creditors. Some states that do not do this and require debts to be paid from fiduciary assets are: California, Florida, Massachusetts, Michigan, New Jersey, New York, and Oregon.

3. Obtain the authority to act as trustee.

A. If you are named in the trust as a successor Trustee, you must have evidence of your authority to act as Trustee. Banks, brokerage firms and other third parties will not provide you with information or allow you to conduct business transactions on behalf of the trust until they have these documents. In most cases, you will need the following documents:

• Original signed trust agreement and all amendments thereto.

• Death certificate of the grantor

• Acceptance of the Trustee Form. By this document, you accept the appointment of Trustee of the trust and agree to perform all functions of the Trustee in accordance with the Trust Agreement and the law.

• Any other document required by the provisions of the Trust Agreement.

4. Notification requirements.

A. Most states require that all beneficiaries be notified within a specified period of time of the Trustee’s acceptance of the Trust and the Trustee’s full name and address. Many states give the beneficiary of a trust the right to obtain a copy of the trust agreement. Unless you have a valid reason not to do so, you must provide each beneficiary named in the trust with a copy of the trust agreement, including any amendments.

B. Notify the post office to forward the mail to your address so that you can receive bills, checks or other mail from the deceased.

C. Notify the Social Security Administration.

D. Notify the personnel or human resources department at the decedent’s workplace or former workplace.

E. Notify banks, brokers, financial advisers, etc.

F. Notify telephone service and utilities.

G. Notify insurance companies. Get instructions for filing claims. Most insurance companies will only notify the beneficiary of the policy. Notifying the company will initiate that process. If the trust is the beneficiary, you, as the Trustee, will need to apply for the benefits.

H. Notify credit card issuers. They will provide an amount due and close the account. Also, if the death was due to an accident, they may provide accidental death insurance.

5. Gather, inventory and take custody of assets.

A. Search for assets. As a trustee, you have a duty to locate and take possession of all of the decedent’s assets. Ideally, the decedent will have kept a schedule of all his assets: those owned individually and those titled in the trust’s name. If not, or if the attachment is incomplete, you should locate the decedent’s financial documents, such as bank statements, investment adviser and broker statements, deeds, stock certificates, life insurance policies, and taxes on federal and state income (or intangible taxes, if applicable) returns.

B. Gather supporting data regarding the property. Once you have determined the existence of an asset, you must obtain the disclosures, certificates, contracts, and policies regarding that asset.

C. Change trustee on existing accounts and open new accounts. For each bank and investment account, you will need to change the name of the trustee who has the authority to manage the deceased’s account for you.

D. Determine the values ​​for the date of death (and, if applicable, alternative values). For investments and securities, you can contact the decedent’s broker or financial advisor to obtain this information. Also, there are many websites that can provide this data.

E. File claims for insurance, Veterans, and Social Security benefits.

F. File exemptions and affidavits that release the property from estate tax ties with the county or state clerk’s office (if applicable).

G. Prepare a Trust Inventory with the values ​​as of the date of death of all assets in the trust and, in the states where applicable, send copies to all beneficiaries of the trust.

H. Calculate the cash required for taxes, fees, and other estate liquidation expenses.

6. Determine the debts against the deceased

A. Determine current bills owed to doctors, hospitals, and funeral homes.

B. Do a diligent search to determine what other debts exist.

C. Determine the validity of, challenge or pay and obtain the receipt or satisfaction of the debts. As an administrator, you have a fiduciary duty to review each claim to determine its validity. If applicable, you have a duty to deny payment of a claim and defend that denial in court.

7. Manage the estate in trust.

A. Collect all income, accounts receivable and other monies owed by the decedent or the trust estate.

B. Investment of assets. As Trustee, you have a duty to preserve, protect, and invest the assets of the trust estate.

C. Manage real estate. If any real estate and the house built on it are vacant. You must take steps to protect property and content from vandalism and damage. If someone resides in the home, you must determine if that person has the right to possess the home. If the occupants are tenants, you should review the terms of the lease, if they are in writing, and be sure to enforce the provisions. You must notify tenants in writing that the landlord is deceased and that they must make all future payments under the lease to you as trustee. The rent must be collected and deposited in the trust bank account.

D. Securing fiduciary property.

E. Keep a detailed record of all income, expenses, and equity transactions.

8. File tax returns and pay taxes owed.

A. Decedent’s final 1040 form.

B. Trust income tax return (Form 1041)

C. Estate Tax Return (Form 706)

9. Distribute the inheritance.

A. You must read and fully understand the distribution provisions of the trust agreement. Distribution to beneficiaries is made after all the decedent’s debts and administration fees have been paid. If distributions equal to a certain percentage of the estate are requested, then those percentages are calculated based on the net worth of the estate after payment of debts, expenses and taxes.

B. If the trust provisions state that the property will be held in trust for the benefit of a specific beneficiary, then you, as the Trustee, must maintain and manage the property subject to the standards and duties that we have mentioned in this guide. .

C. You must keep accurate records regarding fiduciary property, including capital and income additions. Generally, you can make partial distributions to beneficiaries as estate management progresses to retain funds or property for a period of time to pay unexpected liabilities. You can then make final distributions to beneficiaries only when you are sure all obligations have been received and paid. If you make the full distribution too soon and an unexpected obligation arises, such as taxes or a medical bill, after that distribution, you will likely have difficulty recovering funds from the beneficiaries to pay those expenses. If you distributed all of the trust assets without paying all creditors, you may be held personally liable for the shortfall.