Trust Administration and Probate FAQs

How can you know if a trust was properly funded? Do assets that aren’t named in a trust have to go through probate? Get the answers you need to your questions about California probate, taxation, trust administration, and other matters involved in closing an estate.
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  • What Is Involved In Trust Administration? How Does It Compare To The Probate Process?

    Although many of the same steps are involved in probate and trust administration, there are a few important differences in these two ways to settle a deceased person’s estate. Probate is a court-controlled process that is required to transfer assets when assets are in the deceased’s name only. An executor is named to present a list of all the deceased’s holdings to the court, who will then subtract any outstanding debts from the estate before releasing the rest to beneficiaries. Some of the disadvantages to probate are that the proceedings are public record, it is often expensive, and it can take a long time before assets are distributed.

    A living trust allows assets to be transferred without going through probate. If a loved one has assets in a trust in his sole name and he becomes incapacitated or passes away, the assets immediately come under the control of the successor trustee named in the trust agreement. The court is not involved since the “owner” of the assets has not changed—the trust is still the owner—allowing the estate transactions to remain private. In addition, the new trustee can access accounts immediately, making trust administration typically shorter and less expensive than probate. However, the trustee is legally responsible for the management and distribution of trust assets, and the trust must have been properly funded to avoid probate proceedings.

  • What’s California Trust Administration?

    After someone passes away who had a trust, trust administration must be completed by the Successor Trustee named in the trust. There is much to do. Generally a Successor Trustee will carry out his or her duties with the help of an experienced estate planning attorney.

    Even though there are many duties for the Successor Trustee to carry out (e.g. notice to beneficiaries, manage assets, file tax returns, pay off creditors, etc.), trust administration is less expensive (usually 1/5th the cost of probate) and easier than Probate.

  • How long does it take to settle a trust?

    The answer to your question depends on the complexity of the trust assets, whether any creditors have claims on the trust assets, the tax implications of settling the trust, and whether any of the beneficiaries contest the proposed settlement. A simple trust settlement could take as little as a few months, while other trust settlements may take significantly longer.

    Factors That Make Some Trust Settlements Take Longer

    A trust may take longer to settle if:

    • There are many assets. Every asset must be located and valued before a settlement occurs.
    • Assets are hard to value. Trustees have a fiduciary duty to the beneficiaries of the trust. This means that they need to get a reasonable value for each asset. This can take some time in a poor economy or if there is no ready market for a specific asset.
    • A beneficiary cannot be located. All named beneficiaries should be informed of the trust before a settlement is reached.
    • A family member or beneficiary is contesting the validity of the trust. This may occur if the person was not informed of an estate plan and believed it to be something other than what existed at the time of the decedent’s death. Sometimes, if children or grandchildren are treated differently or if significant assets are left to charity, then a dispute may arise.
    • Creditors claim a right to the trust property. Some creditors, such as the IRS and hospitals, may claim a right to the trust assets to satisfy existing debts.

    Any of these factors can stretch the settlement of the trust out by months or years, depending on the unique issue.

    How an Attorney Can Help a Trust Settle Fairly and Quickly

    If you are a trustee or a trust beneficiary and you believe that the trust is not being settled quickly enough, then you should consult with a lawyer. You may be able to go to court to force action to settle the estate, but there are pros and cons to this that should be thoroughly explored with an attorney before you do anything. Your goal may be a quick settlement of the trust, but that shouldn’t come at the expense of a fair settlement of the trust.

    To learn more about your rights and for help settling a trust, please contact us today via this website or by phone to schedule a free and confidential consultation.

  • Does a trustee need an attorney for assistance with the trust administration process?

    Trustees have important legal responsibilities. When you were asked to be a trustee, you may have been honored and eager to help. While those things may still be true, now you have an important job to do and certain legal responsibilities that must be fulfilled.

    What’s Expected of You

    As a trustee, it will be your responsibility to:

    • Identify all trust assets.
    • Treat all of the beneficiaries equally—unless the trust states that you can do otherwise.
    • Make trust distributions according to the terms of the trust.
    • Make sure that you do not use the trust assets for your own benefit or combine trust assets with your own.
    • Invest trust assets in a reasonable way that will allow them to grow with little risk.
    • Keep accurate trust records.
    • Report to the beneficiaries as required.
    • File all applicable tax returns.

    Other responsibilities may also be described in the trust document.

    You Don’t Have to Do This Alone

    Being a trustee can take a lot of time and a lot of effort. It can also put you at risk of being sued if you make a mistake. Accordingly, you may want to protect yourself by working with professionals who can make sure that you are doing everything correctly. For example, an accountant can help with tax returns, a financial planner can help you with investments, and a lawyer can make sure that you are complying with all applicable laws so that you, the trust grantor, and beneficiaries are all protected.

    While not every trust beneficiary needs a lawyer, many will benefit from the experience of a skilled attorney. If you are a trustee, then we encourage you to contact us today for an initial consultation about your rights. If we believe that you can handle your trustee duties independently, then we will tell you that. Likewise, if we believe that we can help you comply with applicable laws and administer the trust fairly, then we will also tell you that.

    In some situations, the trust itself may pay for the professional services needed by the trustee. Therefore, you have nothing to lose by scheduling a free consultation with us. Please contact us via this website or by phone today to learn more.