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California Trust Administration
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TRUST ADMINISTRATION

Trust administration is the process of managing assets in a trust. If applicable, the successor trustee and the co-trustee are responsible for trust administration and fiduciary duty to the beneficiaries. The trustee must ensure that trust assets are adequately protected and used according to the trust instrument. The Trust’s nature will dictate the duties of the trustee.

One important aspect is that trustee and co-trustees protect estate assets, pay off all creditors, and then distributes the estate among designated beneficiaries and their heirs as per California Probate Code Section 16061.7. Contact Hess-Verdon & Associates today at 888-318-4430.

Practice Area: Trust Administration

Southern California Counties: Orange County, Los Angeles, San Diego, Riverside, San Bernardino, Kern County, Ventura County

Central California Counties: Santa Cruz County, San Benito County, Fresno County, San Joaquin County

Northern California Counties: Alameda County, Contra Costa County, Marin County, Sacramento County, Santa Clara County, San Francisco County, San Mateo County

Trust ADministration

What is a trust administration attorney?

A trust administration attorney is a Trust and Estate planning attorney that helps you determine the following:

  • To compile documents: Documents like the Will, the Living Trust document, any amendments, copies of deeds, original birth certificate, and a myriad of the decedent’s financial accounts.
  • Compile names of beneficiaries and heirs: A trust administration attorney will gather names, addresses, etc., of the beneficiaries.
  • Contact the accountant: Your trust attorney must stay in contact with the estate tax accountant.  

This list is just a partial list of how a trust attorney helps keep the trustee compliant and out of harm’s way.

What is Trust administration in California? 

Trust administration is the process that a trustee follows. According to the Trust’s terms, the assets in the living trust document benefit the heirs and beneficiaries following the grantor’s death. Trust administration is a multi-step time-consuming process involving mountainous paperwork and courts dealings. Working with a trust attorney can be instrumental in streamlining the whole process.

What is the difference between a trust administrator and a trustee?

The trust administrator can be the trustee wherein they collect the trust assets, ensure taxes and debts are paid, and then finally distribute the remaining assets to the beneficiaries. However, the trustee may hire an outside private or corporate trustee  service to administer the Trust. Therefore, a trustee coordinates the administration process.

California Trust Administration

If you are looking for a trust administration checklist for California, here is an overview:

Trust Administration Process revolve around the following:

· Communicating about the Trust assets and its terms of distribution to the named beneficiaries

· Filing Federal estate tax return

· Distributing the trust assets to the enlisted beneficiaries per the grantor’s

· Protecting the assets in the Trust

First off, give notice.

The California probate code requires that trust administrators file, within 30 days after the death, the grantor’s will and death certificate to a probate court. Record keeping is paramount.

Following that, beneficiaries and heirs should be informed within 60 days of the details of the Trust, including the Successor Trustee’s name and address. Following the notices, California law allows for 120 days for the beneficiaries to contest the terms of the Trust. After the expiry of that period, beneficiaries may no longer be able to file a contest. (see complete probate code for exceptions)

Please note:

*If a beneficiary files to contest the Trust and the courts agree that the Trust is invalid, the Trust may be legally repealed, and the intestate laws distribute the assets.

*If the courts deny the claim that the Trust is invalid, the trust administrator manages and distributes the assets per the stipulated terms.

*Trust administrators should work with a trust administration attorney, especially when a beneficiary files a contest.

Successor Trustee – Manages Trust Assets.

If a contest is not filed within the period, the beneficiary may surrender their ability to file. 

An essential step in the process is filing a notice of the grantor’s death with the county assessor’s office. 

Initiating the change of title can be a lengthy procedure. It involves filling out change of ownership forms and filing affidavits. A trust administration attorney can help you through these steps. Call Hess-Verdon to guide you through the process at 888-318-4430.

Compile other remaining assets

After transferring the real estate title to the Trust, the administrator should identify other assets in the grantor’s estate plan-these range from investment accounts, second homes, and bank accounts. If any of these assets are not listed in the Trust, that may necessitate probate.

The property consolidation process establishes what the grantor planned in the Trust and will and what they left out. Suppose the grantor left a pour-over will (which allows every asset to be automatically transferred into a trust). In that case, California laws require the Will to be probated before the assets get transferred into the Trust in some cases.

Next, appraise assets.

After you take inventory of all assets in the decedent’s estate, the next critical step is appraising them. An appraisal establishes the current value for proper distribution and tax purposes. Most likely, the terms of the trust outline the percentage distributions per the Will of the decedent. Accurately accounting for all the assets for rightful distribution makes for smooth administration.

Settling the decedent’s debts and liabilities is, no doubt, a critical part of the process. You should notify the creditors, for example, credit card companies, that the grantor has died so they can stop charging interest on the amount owed.

The Successor Trustee should inform credit card report agencies (Experian, Equifax, and Transunion) that the person has died and that their social security number or name should not be used by anyone to obtain new credit.

The assets are no longer a part of the grantor’s estate regarding irrevocable trusts. But that’s not to say that creditors won’t try to come after the Trust. A trust attorney can help to shore up legal protections for the assets in the Trust.

Also, file the Federal estate tax return per the deadlines.

A critical part of executing a trust is filing taxes. A trust administrator should work with an attorney regarding any issues dealing with the IRS and the estate. The trust services from a Hess-Verdon attorney will guide you through the trust administration process.

Taxes are complicated, and they have deadlines. Where estate tax is owed to the IRS, taxes should be filed within nine months of the grantor’s passing. The Trust might also owe income taxes. A trust administration attorney experienced in tax matters can help in this process.

Lastly, distribute and report

Trustee – After notifying the beneficiaries, the courts, the creditors, and the IRS of the grantor’s death and handling all the paperwork and procedures required, the final step in the process is an asset management and distribution. The distribution is done within the premises of the law, of the grantor’s last wishes, and the given type of trust requirements. 

The trust management should be done per California trust accounting requirements, i.e., state and federal laws. As the trustee, you may be required to account for beneficiaries entitled to the distributions of income and principal in the Trust’s lifespan annually. Strengthening the accounting function and working with a lawyer can protect you from unhappy family members and beneficiaries’ lawsuits.

Keep a record of all monies in the decedent’s estate:

· Trustees must handle the decedent’s final affairs, for instance, lawyer fees and your administration fees

 · Deposits and disbursements to beneficiaries

You should manage and distribute assets in the Trust in line with the terms of the Trust. That may involve setting up a new trust to hold the funds for minors or special needs beneficiaries. 

The above is an oversimplification of the trust administration process. In practice, the process is considerably complicated and lengthier; partner up with a trust attorney to speed things up and achieve complete compliance and asset protection.

Here at the Hess-Verdon law firm, we pay close attention to the trust administration process. If you are interested in a corporate trustee, we work closely with various banks to help you administer the Trust. Call today at 888-318-4430.

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Trust Administration

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