Trust Administration
What is a trust administration?
Trust administration is the management and distribution of assets held in a trust for beneficiaries according to the trust instrument created by the decedent. After the decedent passes away, a successor trustee is either named or appointed to complete the administration process. A trust administration is similar to a probate administration. However, it is a private process that is not supervised by the court.
What are the responsibilities of a trustee?
A trustee’s responsibilities include gathering trust assets, transferring property into the trust, notifying required parties, paying taxes and debts, and distributing remaining assets to beneficiaries. The source of power and extent of a trustee’s responsibilities are typically defined in the language of the trust instrument itself.
How long must a trustee serve?
A trustee must usually act until the purpose of the trust is accomplished or until the trustee resigns or is removed. Certain trusts are created to survive one or two generations after a person passes away. Therefore, a trustee’s responsibility can extend for a long period of time, so long as the trust is in existence.
Can a trustee be held personally liable for making a mistake?
Yes. A trustee has a fiduciary duty to always act in the best interest of the beneficiaries of the trust. A trustee who neglects the administration of a trust can be held personally liable for losses that incur. Additionally, a trustee can be liable for exceeding the powers granted by the trust. California has specific rules and procedures that must be carefully followed in order to avoid personal liability. An attorney can guide a trustee throughout the administration process, ensuring that the trustee is fulfilling his or her responsibilities while avoiding unnecessary costs to the trust.
What are the attorney fees related to a trust administration?
The attorney fees associated with trust administration can vary greatly depending on the complexity of your case. Fortunately, the fees associated with a trust administration are based on a reasonable hourly rate and are generally less than a probate administration because of the absence of court costs.
Can a trustee receive fees during an administration?
Yes. Generally, a trustee receives a fee based on a percent of the overall value of assets being administered in the trust. The exact fee varies from trust to trust, but is usually between 1-2%. Trustees can also elect to waive some or all of their fees.
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