Trust Administration Attorneys in Valencia and Oxnard
Your Partner After the Loss of a Loved One
California trust administration is the process whereby your named successor
trustee marshals your assets, pays off your creditors, and eventually
distributes the assets in your trust estate to your beneficiaries. This
sounds easy enough, but it usually isn't. There are hundreds of permutations
that can occur during this process (depending on the trust, assets, people
involved, etc.), but every trust administration requires “legal”
notice be sent out to each person named in the trust and certain family
members as well as timely filing of tax forms. Also, if there is any real
estate in the trust, numerous legal documents changing ownership must
be filed with the appropriate State Property Recorder and Assessor offices
of each county where real estate is located.
The list of potential responsibilities required of a successor trustee
are too numerous to count. Without a doubt, the legal responsibility and
fiduciary obligations thrust upon successor trustees are sometimes onerous
and can even be scary. That's because failure to comply with California
trust laws by properly completing trust administration can result in extremely
negative repercussions for beneficiaries, and successor trustees can be
sued for their action or inaction.
Don't go it alone. After the death of a loved one, you have enough on your
plate. When it comes to wrapping up a living trust, call
(661) 306-2500 or
contact us online today for all your trust administration needs.
Given all the tasks, obligations, and potential liability stemming from
trust administration, sometimes people ask us, “What's the difference
between trust administration and the 'dreaded' probate process?”
The answer might surprise you: Not much. In either situation, almost all
the same tasks must be done. However, probate generally takes twice as
long to complete and costs significantly more — but not always!
If there is one hidden secret about estate planning, this is it: Many
people think when they complete their estate planning, they're done. And
maybe they are, but the successor trustee(s) and beneficiary(ies) of the
trust must go through the trust administration process. Believing that
a trust somehow magically resolves itself when the Settlor of that trust
dies is not only wrong, it can also be dangerous. To reiterate, it's dangerous
because successor trustees have fiduciary obligations to comply with,
and the failure to do so can easily trigger liability.
Who Should Be Named As The Successor Trustee To Administer Your Trust?
Great question! We commonly have conversations with married clients who
have exactly two children. Sometimes, they grapple with whom to name as
their successor trustee. Should the siblings be co-trustees, should the
older child be named first successor trustee while the younger child is
named the second successor trustee, or maybe it should be the “responsible”
child, or someone else entirely? Parents are commonly concerned about
who to choose and do not want to insult the child who is not chosen first
as trustee. It sometimes comes as a surprise to our clients when we explain
that the child who is not chosen is the lucky one. That's because the
child who is chosen to serve as successor trustee has a lot of work to
do, and potential liability to boot. The child who is not chosen can kick
back and do nothing, and if upset, can even sue the successor trustee!
We, as trust attorneys, do most of the heavy lifting in the trust administration
process, but nevertheless, wrapping up a trust is a big job for trustees
to carry out.
It's also important to note that trust administration comes in all shapes
and sizes. Sometimes, the work is relatively easy to complete. Other times,
it is extremely complicated. In our experience, the older the living trust,
the more complicated it is to administer for married couples. That's because
many, if not most, married couple
California living trusts created prior to 2010 have sophisticated tax planning clauses that require
dividing up assets and moving those assets into sub-trusts. They may also
require the trustee to file extra tax returns every year that the surviving
spouse is alive, as well as many other extraneous tasks. While this planning
made sense in the 1990s and 2000s, it rarely makes sense today since “death
taxes” (i.e., estate, gift, and generation-skipping taxes) do not
apply to people who have less than $11.7 million in assets (over $23 million
for a married couple in 2021). By the way, this highlights the point that
you ought to really do yourself and your loved ones a favor and update
your living trust if it is “old.”
For information about what needs to be done when assets are not held in
a trust, visit our
probate administration page.