Trust Administration and Succession

While U.S. Census Bureau statistics indicate that 20% of Americans have a disability, we all have a 100% chance of dying - and either event, if it occurs to the creator of a trust, would result in some trust administration.

Common Problems Experienced by Trustees who are not represented by an Attorney

Trustees are initially selected because they are trusted by the creators of the trust, not because they have any experience at trust administration.

Although a trust administration process is far superior to probate, there is still much to consider, and mistakes flow naturally from inexperienced trustees who are not represented by counsel. Please reference Fiduciary Law which briefly discusses the trustee’s personal liability for violation of their fiduciary duties.

Therefore, if you are a trustee who is thinking about not retaining an attorney experienced in trust administration, please understand that you will pay for your mistakes, which are often very expensive, out of your own pocket. Consider the following responsibilities:

  1. There are deadlines:
    • regarding notification of beneficiaries and some governmental agencies
    • within which creditors may bring claims
    • within which a disclaimer must be filed and certain tax elections made
    • within which all estate, gift, income and trust tax returns must be filed
    • within which an accounting must be served on the beneficiaries
    • within which a trust may be contested (shortened if beneficiaries are notified properly
  2. The trustee must coordinate with the executor of the will to administer all assets of the estate and it is possible that a probate proceeding may be commenced if there are assets subject to probate. If the trustee is also the executor, as if often the case, then that person must manage the probate to a conclusion as well as the trust administration. There are many other deadlines in the probate proceeding.
  3. Tax ID numbers must be obtained for any subtrusts and the assets allocated among them exactly as stated in the trust, sometimes according to a complicated funding formula in the trust.
  4. Changing title to real property should be considered a legal service because of the ramifications concerning property taxes, chain of title and title insurance.
  5. Proper trust administration involves the coordination and delegation of many tasks to the trustee, executor, accountant, financial planner (to comply with the prudent investor rule), trust attorney, and other professionals.
  6. If there are minor or special needs beneficiaries, special precautions need be taken.
  7. Finally, what happens if after the trustee has distributed all assets, a beneficiary contends that he or she should’ve received more or a creditor claims that he or she must be paid ? You guessed it right. The beneficiaries will seek to hold the trustee responsible.

If You Retain Us as Counsel for the Trustee

  1. You will participate in the third step of our Three Step Strategy designed to create, implement, update and administer an estate plan that will work, referred to under Law Firm Procedures
  2. You will be represented by a certified specialist in estate planning, trust and probate law who will make sure that you satisfy your fiduciary duties under the law.
  3. We will meet to assist you in gathering all pertinent information about the decedent including estate planning documents and financial data. We will then review that information and documentation and provide you with a Trust Administration Memorandum which summarizes your estate planning documents, explains your duties and powers, discusses tax matters and explains our role in the process.
  4. Critical deadline dates will be calendared and written reminders sent.
  5. We will engage and coordinate with the other professionals you select as necessary to the process.
  6. We will guide you through the multitude of necessary decisions and send you regular reports of your work and our work as we proceed through the process together. We will also advise you how you can do more to reduce our fees.
  7. We will represent you as trustee in the event of any disputes with beneficiaries.
  8. Before any assets are distributed, we will have all beneficiaries sign a Final Account and Report, Asset Allocation Agreement and Asset Allocation Spreadsheet, by which they approve of your actions as trustees and their shares of the final distribution of assets.
  9. Our fees will be paid out of trust assets.

Law Offices Of Michael J. Wittick, A Professional Law Corporation is located in Irvine, CA and serves clients with estate and wealth preservation matters throughout Irvine, Lake Forest, Laguna Woods, Laguna Hills, Foothill Ranch, Tustin, Aliso Viejo and the surrounding areas.

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| Phone: 949-753-2829

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