What is Trust Administration?
A trust is a legal agreement in which the management of the assets is separate from those who benefit from the assets. An individual (the grantor or settlor) creates the trust, re-titling property and assets to become a part of the trust, for the ultimate benefit of those named as beneficiaries. Trust administration refers to the management of the assets within the trust. A trust administrator has a fiduciary duty to protect the assets, ensuring they are used as the trust specifies. The nature of the trust will determine the actual duties of New York trust administration attorneys.
Following the death of a loved one, coping with their absence can be emotionally difficult. On top of this, there are many legal issues that must also be taken care of—like wrapping up the legal details in your loved one’s estate. If that person had a revocable or irrevocable trust, you must administer the trust according to the proper legal procedures. New York trust administration attorneys at Davidov Law group can help you get through these details quickly and efficiently.
Risks of Not Having the Right Trust Administration Attorneys
When there is no trust administration attorney, the necessary tasks might not be completed as necessary. When a named successor trustee attempts to handle trust administration—particularly when instructions in the trust are ambiguous—legal clarifications can be crucial.
Even the most committed trustee can benefit from the services of New York trust administration attorneys. Without this legal assistance, the estate might not be properly closed. When a trust administration attorney is not involved, filing deadlines could be missed, essential documents might not be gathered, and assets that are outside the trust might not properly go through probate.
Financial planning is an important component of trust administration. Trustees may invest trust assets with the goal of growing the estate, but they must always allow for full distributions to the beneficiaries. A trustee might not have the knowledge or skills necessary to choose the right investments; a knowledgeable trust administration attorney can help with this task, ensuring the trust complies with all rules related to tax reporting.
Retirement accounts can be especially tricky when the trust is named as the beneficiary of an IRA or 401(k) account. The trustee can benefit greatly from the assistance of a trust administration attorney who can ensure the trust is appropriately funded with the assets and that they meet the minimum distribution standards. Finally, when there is no trust administration attorney available, disputes between beneficiaries can quickly lead to litigation.
Without the assistance of New York trust administration attorneys, taxes might not be paid in a timely manner. An experienced trust administration attorney is well-versed in determining property tax liabilities. The trust administration attorney can also ensure all compulsory tax returns are filed and tax payments made. If the trustee fails to address tax issues prior to distributing trust assets to the beneficiaries, the trustee could potentially be held liable for paying the decedent’s taxes.
In some cases, a trustee may unintentionally violate his or her fiduciary duties, simply because they are unfamiliar with the law. As an example, while a trustee may not mix trust assets with their own, they are allowed to use their own personal checking account to hold investment dividends or assets. Making a financial misstep with trust funds can leave the trustee personally liable. Having a trust administration attorney during the process can ensure there are no such mistakes.
When the trust owns a business the trust instructions may state who will be the successor in the business. Other times, the trust may have few, if any, instructions regarding how the business will be run. If the beneficiaries disagree about how the business should or should not continue, having experienced New York trust administration attorneys from Davidov Law Group can make a significant difference in the outcome of such disagreements. A trust administration attorney can advise trustees on the legalities of preparing a new continuity plan, the legal aspects of appointing successors, or whether the business can be sold with the profits being added to the trust funds.
What Do Trust Administration Attorneys Do?
There are varying levels of trust administration services offered by New York trust administration attorneys. Primarily, trust administration attorneys help those who have lost a loved one navigate through trust administration, while adhering to the instructions outlined in the decedent’s estate plan. Trust administration attorneys assist appointees like a successor trustee or an executor in understanding their duties and guiding them through the decisions. Some duties of a trust administration attorney include:
- Assets must be gathered, protected, and managed
- All beneficiaries and heirs of the estate must be notified
- Assets must be identified and inventoried
- Appropriate tax returns must be filed
- Creditors must be located, and all debts properly paid
- All taxes must be paid from the estate
- Business succession plans must be implemented
- If there is life insurance, it must be identified and collected for benefit of the heirs
- Remaining assets in the estate must be distributed to beneficiaries according to the instructions in the trust
Benefits of Working with Davidov Law Group Trust Administration Attorneys
Trust administration attorneys do not only engage in the responsibilities associated with trusts when a person dies, a trust administrator may also ensure trusts are properly administered from the time they are set up. In this case, the responsibilities could include:
- Filing all income tax returns—Trusts are generally required to file tax returns so the trust administrator must keep a close watch on tax issues throughout the year to prepare for tax filing.
- Overseeing investments—In some cases, trust assets are investments. Investments require consistent attention to ensure they are performing in a manner that benefits the trust. Funds must be invested using the Prudent Investor Standard, with a primary focus on guarding the principal and the return on investments the secondary focus.
- Managing and protecting all assets held by the trust—This can include such things as the maintenance of real property to the reconciliation of bank statements.
- Properly following all terms of the trust—A trust administrator must follow trust terms unless those terms are impossible, illegal, or unconscionable.
- Resolving conflicts among beneficiaries as they arise—The trust administrator or trustee must remain neutral, resolving conflicts before they escalate and result in litigation.
- Protecting the interests of all heirs or beneficiaries—A trust administrator must make safeguarding the interests of the beneficiaries a priority.
- Keeping beneficiaries well-informed—Throughout the life of the trust, a trust administrator must always be ready to inform beneficiaries how the assets in the trusts are being managed.
- Distributing trust funds to beneficiaries—While the terms of the trusts will dictate how and when the trust assets are to be distributed, a trust administrator may also have the discretion to make additional distributions.
- Keeping detailed trust records—The trust administrator is ultimately accountable for the success or failure of the trust, therefore, detailed records of each decision are crucial.
How to Select the Best Trust Administration Attorneys for Your Current and Future Needs
The New York trust administration attorneys at Davidov Law Group have an in-house Certified Financial Planner with a depth of experience in financial matters. Our holistic view of planning ensures effectiveness. With more than 25 years of client service and 2,500 families protected by our firm, we understand that each family has its unique goals and concerns. For more information regarding estate planning, we have written a book called “Keeping it in Your Family—Protecting Your Family and Leaving a Lasting Legacy.”
How Davidov Law Group Will Protect Your Family and Preserve Your Legacy
Our attorneys at Davidov Law Group regularly represent trustees and beneficiaries in trust administration. We are aware that the process can be tedious and confusing for many people. We can guide you through the process and help you settle an estate as quickly and efficiently as possible while minimizing the possibility of conflict and disputes. Our lawyers will be by your side every step of the way, steering you through the often-complicated legal issues.
Davidov Law Group strives to build strong client relationships, understanding your goals before we make recommendations. Our experience in trust administration makes us effective and efficient. As a family-owned firm, we work hard to help other families plan for their future or help with present-day tasks like trust administration. Contact Davidov Law Group today to protect your family and preserve your legacy.