Trust Administration refers to the process in which a Trustee acts to manage and administer the assets held in a trust. Trust Administration does not usually require court involvement. This is one of the many reasons that people prefer trust administration over probate. The typical lack of judicial oversight, however, does not mean that there are no rules or formal requirements associated with Trust Administration. Trustees are bound by certain legal duties and obligations, and must administer the trust according to the terms of the Trust Agreement, and while observing all of the legal duties and obligations of a Trustee.
Typically, a Trustee is required to take an inventory of trust assets and provide an accounting of those assets to the trust’s beneficiaries. The Trustee is also generally responsible filing tax returns and ensuring taxes are paid on any Trust income. Additionally, Trustees are generally expected to observe duties of loyalty, duties of care, duties not to engage in self-dealing and others.
The Trust Agreement itself may also impose additional responsibilities. For example, Trustees are sometimes expected to manage trust assets in order to maximize growth of those assets. In other instances, a Trustee might be expected to manage and invest trust assets in a way that maximizes monthly income, and then distribute that income to the Trust’s beneficiaries on a regular basis.
Sometimes a Trustee’s duties will be carefully spelled out in the Trust Agreement. Sometimes the Trust Agreement is vague and requires some interpretation. Throughout the Trust Administration process, it is important that both the Trustee and the trust’s beneficiaries understand the rules and priorities under which Trust is administered.
If you have been appointed Trustee of a trust, or if you are the beneficiary of a trust and want to better understand the role of the Trustee, or any other aspect of the Trust Administration process, you should contact an the experienced Trust Administration Attorneys at the Gunderson Law Group.