Through our experience in assisting clients with the administration of living trusts, we have found that many people believe that living trusts avoid all administrative expenses and formalities following the death of a Settlor. This is one of the most common myths surrounding living trusts.
It is true that a living trust can significantly reduce the costs and delays involved in administering an estate by avoiding probate. However, even without a probate, the Trustee must comply with many formalities and carry out certain duties under the Trust Law. This involves the preparation of legal documents, the filing of tax returns, and addressing other matters which take some time and cost money. If these formalities are overlooked or incorrectly performed, then the Trustee may be liable for any resulting damages or even surcharged in the event of a breach of Trust.
Most people have had little or no experience dealing with trusts and often have many questions upon becoming a Trustee for the first time. As your attorney, my job is to assist you in carrying out your duties as Trustee and to help ensure that your actions comply with the trust instrument and the Trust Law. I can help you collect and value assets, pay any debts and expenses, and prepare all documents reasonably necessary to conduct the trust administration properly and effectively. I am available to answer questions and will provide advice and instructions concerning ongoing trust administration.
Please keep in mind that I represent only the Trustee and do not represent the Trust or any of the beneficiaries of the trust. Any communication between the Trustee and my office is subject to the attorney-client privilege and will be kept confidential. With the Trustee's permission, I may provide information to the beneficiaries and answer some of their questions. However, it is inappropriate for me to give them legal advice. Doing so might constitute a conflict of interest and a violation of my ethical requirements under the Rules of Professional Conduct. In short, my responsibility is to help the Trustee in carrying out their duties and in complying with all the formalities of a trust administration which are required under the Trust Law.
The living trust is a flexible and useful device for administering an estate. There are many formalities which the Trustee is required to comply with. In this regard, adequate management and record keeping procedures should be implemented by the Trustee. Once these procedures are in place, their continued maintenance is relatively straightforward. Most living trusts can be administered by individuals after they are successfully under way with minimal assistance from attorneys, thus achieving numerous benefits for the Settlor's family and other beneficiaries, at minimal cost. Nevertheless, accepting the trusteeship is a substantial responsibility and the Trustee should always seek professional investment, accounting or legal assistance as soon as questions arise.
Contact us for a Free Consultation to learn more about Trust Administration.