Trust Administration – The Secret Sauce

A trust is a legal, fiduciary arrangement that allows a person to hold and direct assets held in the trust. A trust can be set up under a trust agreement executed during the creator’s lifetime or can be created using the Last Will and testament after the estate owner’s death.

What is Trust Administration?

Trust administration in Santa Rosa refers to the management of a trust. As the executor of a will, a trustee is responsible for preserving and protecting assets placed in the trust, investing trust assets, preparing and filing tax returns and handling compliance related issues, and ensuring that trust assets are distributed among the beneficiaries in accordance with the creator’s wishes and in a timely manner.

Trust Administration Benefits

There are several benefits of trust administration. It is less costly than probate, expedites the process of ownership transfer, and is more private-the trust administration process prevents private financial information, ownership transfer details, and details about your estate from becoming court records.

What Does a Trust Administrator Do?

Some duties of a trust administrator include:

  • Obtaining the necessary legal documents required to prove the validity of the trust
  • Filing final income tax return for the creator and death tax return
  • Filing income tax return for the trust as long as it is open
  • Notifying banks and other financial institutions, trust beneficiaries, and heirs of the creator’s death
  • Obtain appraisals or valuation of assets held in the trust
  • Collecting policy proceeds
  • Investing trust assets in a prudent manner
  • Paying ongoing expenses incurred to manage the trust
  • Liquidating trust assets to pay off debts if required
  • Distributing assets among the beneficiaries

Some Duties of a Trust Administrator

Duty of Prudence

A trust administrator must invest trust assets prudently. They must administer the trust with a degree of skill, caution, and care. They can also hire accountants, attorneys, and investment advisors to assist them.

Duty Not to Delegate

A trustee should not delegate their responsibilities or tasks to someone else. If, for instance, the trustee of a trust is a stockbroker, they must use their skills to do research before investing in a stock or company, instead of making investment decisions based solely on recommendations.

Duty of Loyalty

A trustee must have the beneficiaries’ best interests at heart. They are duty-bound to act solely in the interest of the beneficiaries. They cannot misuse their position to further their private interest.

Duty of Impartiality

When distributing trust assets, the trustee cannot favor one beneficiary over others. They must consider all the factors when distributing assets.

Johnston & Associates Law is committed to helping individuals protect their assets. We help Santa Rosa estate owners create effective estate plans to fit their unique needs. To make an appointment with one of our attorneys, call (707) 545-6542.