People create trusts for many reasons, including to avoid estate tax and to avoid the costs of nursing home care by ensuring they can qualify for Medicaid. People also create trusts in order to avoid the probate process, to provide broader asset protection, and to make certain that beneficiaries or heirs do not squander the money which has been left to them.
When you believe that a trust could help as part of your estate planning process, you can contact The Law Offices of James A. Miller to find out about how a Worcester trust administration lawyer can assist you. We can help you to do many important things, including creating a legally valid trust and choosing a trustee.
After a trust creator has passed away, we also provide help to the trust administrator in fulfilling trust obligations.
Both those who are creating a trust, as well as those who have been designated as a trustee, need to understand the trust administration process. In particular, you need to know who is in charge of the trust administration process and what the process will entail. Call today to find out more.
Who Should be Put in Charge of Trust Administration?
When a person creates a trust, that person is called the settlor or trust creator. The settlor can sometimes be the primary trustee, depending upon the trust type. This would mean the settlor essentially keeps control over the trust and its asset but there is a backup trustee who can step in and take control when necessary. The backup trustee could take charge of managing the assets of the trust during the time when the settlor is still alive.
After the death of the settlor, trust administration must occur. Typically, this process will be overseen by the trustee who was named in the trust document. The trustee will become the trust administrator and will make certain the wishes of the deceased are respected. The job of the trustee at this point will be to:
- Initiate the trust administration process
- Manage the assets held within the trust in an effective manner to protect their value
- Facilitate the appropriate transfer of assets to beneficiaries as directed by the trust document.
The trustee has a fiduciary duty to ensure he follows the instructions of the deceased and acts in the best interests of trust beneficiaries through the entire process of trust administration. It is advisable for the trustee to be represented by a trust administrator because of the complexities associated with the trust administration process and because of the potential for legal liability that is associated with failures during the process of administering a trust.
Choosing a Trustee Who Will be in Charge of Trust Administration
When you are creating a trust, you need to make smart choices regarding who you select to serve as your trustee as this person will be in charge of trust administration. Trust administration, unlike probate, does not occur in court so there is no direct judicial oversight of the trust administration process. If there are problems, beneficiaries would have to initiate legal action and pursue a claim against the trustee, which can be costly and complicated for those who stand to benefit from the trust.
Because you want the trust administration process to go smoothly, you need to choose a person as trust administrator who is both competent and trustworthy. The trust administrator has to do a wide variety of complicated legal steps during the trust administration process. This not only includes the appropriate management of all assets that are held within the trust but it also includes doing things like filing tax returns and taking steps to formally change legal ownership of all property held within the trust.
Getting Help from A Trust Administration Lawyer
A trust administration lawyer can provide you with invaluable advice on the process of administering a trust, or with the process of creating a trust and selecting a person who will be in charge of trust administration. You need to make smart and informed choices both during the trust creation process and during the trust administration process.
To find out more about the purposes of trusts and the role they play in your estate planning process, download our free estate planning worksheet. You can also give us a call at 508-799-8885 or contact us online to speak with a member of our legal team who can offer you the advice you need to make smart choices on who will serve as trust administrator.