Be Prepared for the Rigors of Trust Administration

The Law Firm of Kavesh, Minor & Otis, Inc. Can Help You Simplify Trust Administration

A trust is one of the most powerful estate planning tools Californians can leverage to protect their assets and their heirs from the rigors of probate. However, for all the advantages a trust can offer, administering a trust can pose very real challenges for successor trustees. Without the right combination of preparation and legal experience, managing a trust can very quickly become an exercise in frustration.

You don’t have to take on the weight of fulfilling a loved one’s legacy alone. The experienced trust administration attorneys at The Law Firm of Kavesh, Minor & Otis, Inc. have spent decades helping Los Angeles and Orange County residents overcome the many obstacles inherent to trust administration. Here, we discuss what to expect from the administration process.

An Overview of Trust Administration

An estate plan can take many different forms. The choices that an individual makes during their lifetime—to name heirs, to write a will, or to establish a trust—can have far-reaching implications for their estate, determining whether inheritances will be distributed under a probate court’s supervision or through the more private process of trust administration.

In a typical probate case, the deceased person’s appointed representative is tasked with executing the terms of their last will and testament. Many different conditions must be fulfilled before heirs can receive their inheritances, with many different steps requiring pre-authorization from a local probate court. It can take months and sometimes longer for the estate’s assets to be located and inventoried, for creditors to be paid, and for the conditions of distribution to be approved.

Trust administration, in contrast, is often more efficient. It does not involve probate petitions or routine check-ins with county clerks, nor does it provide unhappy heirs with as many opportunities to let their grievances take the form of a lawsuit.

Nevertheless, trust administration is not always a simple or straightforward process. In many cases, the successor trustee—the person or party appointed to fulfill the trust’s conditions—must take on many of the same responsibilities as an executor but without any of the protection offered by the probate court’s rules and regulations.

Major Responsibilities of a Successor Trustee

Successor trustees don’t have to deal with all of the same filing and deadline-related headaches as estate executors, but they still have a lot of work in store for them—and that’s assuming that administration goes smoothly. In general, a successor trustee’s responsibilities include the following:

• Collecting trust assets and notifying their locations
• Transferring ownership of certain assets from the decedent to the trust
• Assessing the trust’s tax liability and preparing any necessary returns
• Investigating creditor claims and paying valid debts
• Distributing trust assets to the trust’s named beneficiaries
• Resolving conflicts among heirs—sometimes through face-to-face mediation and sometimes in court

For small trusts with uncomplicated provisions, administration isn’t always difficult. But, under most circumstances, adopting the role of successor trustee and seeing it through requires significant investments of time, energy, and money.

The Role of Trust Administration Lawyers and How Our Torrance CA Team Could Help You

If you’ve been appointed to serve as a successor trustee, you’ve likely already had conversations with the trustor—the person who established the trust—about what to expect in terms of assets and inheritance conditions. But, even if this isn’t your first time overseeing a trust, it’s easy to get overwhelmed by the demands of fulfilling the legacy of a friend or family member.  

Trust administration law firms like The Kavesh, Otis & Minor, Inc. know just how complicated it can be to supervise heirs, assets, and inheritances. However, trust administration is a big part of what we do. Our attorneys have decades of experience administering trusts of varied sizes and complexity, and we know what it takes to preserve the integrity of a trust from start to finish.

You may not need or want an attorney to fill your role, but a trust administration lawyer could provide critical assistance by:

• Reviewing the trust formation documents and explaining what steps you need to take to fulfill your duties as an administrator
• Preparing legal paperwork to facilitate the transfer of assets from the decedent’s estate into the trust’s care
• Performing periodic maintenance to ensure that you’ve kept the trust current on taxes and record-keeping obligations
• Referring you to management professionals who could help keep volatile or fluctuating assets—like stocks, bonds, or cryptocurrency—safe from market pressure
• Providing an impartial voice and protecting you from allegations of breach of fiduciary duty, by defending the trust from challenges and mediating disputes among the trust’s beneficiaries

No matter how involved you want to be with the trust’s routine administration, retaining the services of an experienced attorney could help preserve the legacy you’ve been entrusted to protect—all while giving you more flexibility in your day-to-day life and, potentially, saving the trust from unnecessary taxes, fees, and fines.

3 Signs You Might Need a Trust Administration Attorney

If you’re committed to serving as a successor trustee, making the decision to get help with the administration isn’t always easy. Here are three big signs that it might be time to consider calling an attorney: 

1. You’ve Never Served as a Successor Trustee Before

The terms of the trust may be clear-cut, but the responsibilities of a successor trustee can be much more complicated than they appear. Outside of having to manage a variety of different assets, you may also need:

• An intensive understanding of California’s trust, estate, and probate regulations
• An ability to keep meticulous records and perform advanced accounting operations
• An awareness of different timeframes and deadlines, from sending notices to heirs to filing tax returns

The Law Firm of Kavesh, Minor & Otis, Inc. has spent years administering trusts of all different sizes, meaning that our team already has what it takes to administer most trusts—even those that are very large or very complex.

2. You Don’t Know What Assets Are Included in the Trust or How to Manage Them

The trustor should have given you some background on the trust: which assets are already in its possession and what needs to be re-titled upon or after death. However, unless the trust documents were very regularly updated, trust assets are sometimes moved to unexpected places or go missing entirely.

Similarly, certain types of assets can be difficult to handle. If the trust includes commercial properties, stocks, or other varieties of investments, you still have a legal duty to manage them efficiently, even if you don’t know how. Any mistake, no matter how minor, could result in your being financially liable for resulting losses.

The Law Firm of Kavesh, Minor & Otis, Inc. could help you take stock of a poorly structured trust or retain control over one that turns out to be far more complex than it may have first seemed.

3. You’re Facing Allegations of Impropriety or Poor Leadership

Successor trustees are entitled to exercise more discretion than estate executors. However, exercising your judgment can come at a cost—especially if the trust’s beneficiaries don’t agree with your decision-making process. Even if you haven’t done anything wrong and are making a good-faith effort to fulfill the trust’s terms and conditions, it’s quite common for heirs to blame any delay on successor trustees.

An experienced Torrance trust administration lawyer could help you avoid discrepancies and push back against unfounded accusations of impropriety.