How to Properly Administer a Trust

8 Steps for Administering a Trust in California

Administering a trust can be a complicated and detailed affair, depending on the circumstances of the case and the assets involved. However, with the help of an experienced Trust Administration attorney, the process can be straightforward and brief. The timeline for a trust administration varies from situation to situation, but we can give you a quick overview of the process and the steps needed to settle the affairs of the estate.

1. PROVIDE NOTICE TO ALL HEIRS & BENEFICIARIES (AND CREDITORS)

A Trustee is legally required to provide notice of a trust administration to all heirs and beneficiaries of the decedent. A specific legal form must be mailed out so everyone involved with the case can have the opportunity to contest the proceedings (they have 120 days after receiving the notice). It is also recommended that the trustee also sends notices to creditors, so they can begin to process any claims and help speed the administration process up.

2. IDENTIFY ALL ASSETS IN THE TRUST

Identifying all assets in a trust is one of the first and most important things a trustee must do, as they can be held liable if any issues with the assets rise. It is the trustee’s job to make sure no assets are stolen, lost, or destroyed.

3. INVEST TRUST ASSETS

Once the admiration process begins, the trustee must act as a fiduciary to the estate and invest the assets in the most prudent manner possible. A trustee must invest liquid funds (cash) in a way that minimizes risks but also provides a return. Real property should be rented (if they are vacant) or sold in a reasonable time period.

4. COLLECT TITLES

The trustee must also obtain the various titles of property and assets in the trust, such as homes, cars, or anything else with a title.

5. GET ASSET APPRAISALS

The trust must get appraisals for all assets in the trust as quickly as possible. This process can help lower taxes because of cost basis adjustments.

6. PAY OFF DEBTS AND CREDITORS

Any debts that are not paid off can come back as a personal liability of the trustee. This step goes back to send out notifications to creditors in step 1.

7. COMPLETE TAX RETURNS

The trustee must also file all tax returns for the estate. This includes the personal tax returns of the decedent, the trust, and any assets in probate.

8. PREPARE A PLAN AND DISTRIBUTE TRUST ASSETS

Finally, the trustee must prepare a plan to distribute trust assets. This step will include title transfer, deed preparation, and various other items required to settle the estate.

If you are in the process of administering a trust and need direction or help, our team at Elder Law Services of California specializes in Probate & Trust Administration. Contact us at (800) 403-6078 for a consultation with an expert trust attorney. We look forward to working with you.

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