Maybe you’ve been named as trustee of an estate and are wondering if you should take on this responsibility. The first factor to consider is whether you have the time to do so. Administering a trust typically involves all of the following duties, and sometimes many more:
- Locating and protecting trust assets
- Collecting life insurance policies, annuities, and retirement accounts that name the trust as the primary beneficiary
- Coordinating settlement of the estate with the personal representative if a probate administration is necessary
- Obtaining the values of all trust assets at the time of the trustmaker’s death. These assets include real estate and business interests
- Ascertaining and paying off all of the trustmaker’s debts from funds remaining in the estate
- Assessing income and estate tax liabilities
- Preparing and filing all required income and estate tax returns
- Paying the ongoing expenses of administering the trust until it can be terminated and distributed to beneficiaries
- Raising the cash necessary to pay off debts, the ongoing expenses of administering the trust, and estate and income taxes
- Investing and managing trust assets until they can be distributed to your beneficiaries
- Distributing all assets left in the trust after all of the aforementioned debts, taxes and expenses have been paid
Satisfying all of these duties is both time consuming and, in many instances, extremely complicated. Another factor to consider is that a trustee can be held personally responsible for failing to carry out the mandates of the trust to the letter. Even if a mistake was inadvertent, penalties can be severe.
Clearly, the decision to serve as trustee should not be taken lightly. We can help you understand the responsibilities and risks involved, and guide you through the process every step of the way. If you have been named as a trustee, we are here to assist you. Contact us for a consultation at (626) 696-3145.
