You may be considering setting up a trust for your assets to simplify distribution to your heirs after your death. On the other hand, you may be a trustee for someone else’s estate. If you are establishing a trust, you must give explicit instructions about how family members should handle your assets. Likewise, if a loved one named you as a trustee, you must follow the grantor’s instructions and distribute their assets properly after their passing.
Two kinds of trusts exist, and each requires specific duties from grantors, beneficiaries, tax authorities, and state and federal governments. The process can be complicated, but an Irvine trust administration lawyer could guide you through each step. Contact a diligent trusts attorney for more information.
What Types of Trusts Can a Person Establish?
A revocable or living trust is an estate planning tool that distributes assets to a private trustee. Unlike assets named in a will, property in a revocable trust is available immediately after a grantor’s death and would not be subject to probate..
Once a grantor adopts revocable trust documents, they can add or remove assets. If a person becomes incapacitated, the courts do not need to appoint a conservator because the administrator named by the grantor oversees the trust assets. Once the grantor dies, the revocable trust becomes irrevocable.
An irrevocable trust cannot be changed once established because its assets no longer belong to a grantor. Instead, the property belongs to the trust, which can separate assets, such as shares in a family business, from the rest of the estate.
A seasoned attorney in Irvine can help individuals develop a trust administration plan to protect the future of their assets.
The Duties of a Trust Administrator
A trust administrator’s primary job begins when a grantor dies. These individuals must protect the assets of a trust and follow a decedent’s instructions accordingly. A representative must also:
- Identify and value trust assets, which can affect capital gains, income, property, and estate taxes
- Pay outstanding bills the trust owes
- Identify all beneficiaries
- Retitle assets into beneficiaries’ names
- File a Form SS-4 to obtain a taxpayer identification number from the IRS
- File a Form 706, the federal estate tax return, within nine months of the grantor’s death (California does not tax inheritances)
Other forms may be required, including Form 1041 to report income taxes with which tax details should be confirmed with a licensed CPA.
A Trust Administrator’s Final Duty
Once a trust administrator files all necessary documents, they can disperse assets as the grantor intended. It is essential for an administrator to maintain contact with beneficiaries to keep them informed about a trust and facilitate the distribution of property. Beneficiaries who ask questions are less likely to challenge a trust administrator’s decisions. Contact a wills and trusts lawyer to learn more about administering a trust in Irvine.
Can Trusts Be Contested?
Trust administrators must be aware that beneficiaries can bring legal action against them if they fall short of their duties and cause the trust to lose money. Likewise, if an inheritor thinks a grantor was incapacitated while adding and removing assets, they may challenge an administrator’s intentions.
If an administrator is unsure how to manage a trust, a knowledgeable attorney in Irvine could help explain the process and avoid potential disputes.
Contact an Irvine Trust Administration Attorney for Help
Revocable and irrevocable trusts are essential tools for estate planning. They are less costly and time-consuming than probating a will and can be amended at any time. Likewise, trust administration can ensure that a representative carries out and fulfills your requests after your passing.
Whether you are a grantor or an administrator, an Irvine trust administration lawyer can help. Call for your initial consultation.