Trust Administration

The lifetime of a trust can be broken down into two stages. The first stage is while one or both Settlers are alive and have capacity. During the first stage, the trust assets are generally managed the same as they were before the trust existed. There is very little that will change from your day to day asset management, even though your trust now owns or controls them. All income and principal is still available to the Settlor(s).

If your trust is a Married Trust then some management must usually be done at the first death. But it is minimal in most cases. If there are children from a prior marriage or a Settlor wishes to donate at their death and they are the first to pass, then the remaining spouse (Trustee) will have to make sure these beneficiaries receive their assets at the first death. This will require, perhaps, the sale of assets and/or retitling. If there are any joint accounts or jointly held assets, the name of the deceased spouse should be removed from title by affidavit.

The second stage of Trust Administration occurs when all Settlors have passed. At this stage your Successor Trustee(s) will step into your shoes and will now carry out your plan for managing and distributing your estate. This second stage of Trust Administration is often given little attention when a trust is first drafted and delivered. This is probably because it could be many years before a Successor Trustee will take charge. So why deal with it now? There are several reasons why this stage should receive more attention at the outset.

It is very helpful for the potential Successor Trustee to know the scope of their duties as early as possible. A considerable amount of time may be required for them to understand what they will need to do when they are in charge. Additionally, it may be useful to inform beneficiaries what they will be receiving and when/how they will be receiving assets. This can avoid future potential conflict.

In this Second stage, the Successor Trustee may have a considerable amount of work to do initially and for years to come. The Successor Trustee must: determine who are current and contingent beneficiaries and give note to them that they have been named in the trust. The Trustee may send waivers to them asking if they will waive a formal accounting and the 180 day.

Rocklin Office

4970 Rocklin Road, Ste 300
Rocklin, CA 95630
(916) 599-7297
Fax: (916) 471-0106

folsom Office

101 Parkshore Drive
Folsom, CA 95630
(916) 599-7297
Fax: (916) 471-0106