What To Do If You Are Named Trustee Of A Trust

Although we have often written about the benefits of starting your own trust, what happens if you are on the other end of that trust? What if you are named as a trustee? You may be confused, and concerned that you don’t have the estate law knowledge necessary to properly carry out your duties as a trustee. Here are some simple and basic guidelines about your duties as a trustee.

The First Steps

Your initial steps are to obtain a death certificate (you’ll likely need multiple copies as you deal with different agencies of government and other companies), and file the will in your local court. You should also notify government agencies, such as the Social Security Administration.

Beneficiaries who should be listed in the trust must be notified. You may have to figure out who beneficiaries are. If the trust just says “my son,” or “my relatives,” you may need a lawyer to see how state law defines vague terms like these.

You should inventory all property trust property, locating it, making sure it’s secure and that it actually exists and can be located. Many trusts do not keep a nice tidy list of all property contained in it. In those cases, you will have to go through the decedent’s records, like his mail, filing cabinets, email, computer and phone records, to determine what property is in the trust or should be in the trust.

Any property not already in your name as trustee will need to be transferred into your name, allowing you to administer the property as the trust dictates. You will also need a tax ID number for the trust from the IRS, and from the State government as well. You must pay any income and estate taxes that are owed, and property may have to be appraised to establish a date of death value.

You will need to use trust assets to pay immediate expenses, such as funeral expenses, or medical expenses. If you have doubt about whether a creditor is legitimate, or can legally be paid, you will need to speak to an estate attorney.

You can also use trust assets to pay professionals needed to maximize trust assets, such as brokers or financial advisors.

Recordkeeping 

Sometimes, a trust is a one-time job. The testator passes away, and leaves specific instructions over how the trust is administered. If you haven’t already, you should read the trust, so you understand the testator’s wishes.

Then, simply carry out the wishes as stated in the trust. This may be simple, such as giving property to a person outright. Or, it may require a bit more work, such as if the money is to be used to start a foundation, or if it is to be given to a charity.

You will need a more robust recordkeeping process if you are administering a long term trust, such as a trust that is not to be distributed to a minor until she reaches majority, or a trust that needs to be held until some event happens.

You can usually pay expenses related to recordkeeping (like accounting software) from the trust assets. Remember that you are a fiduciary, and are charged with legal duties as a trustee. Even if you pay something out of a trust that is totally legal and warranted, you don’t want an issue to arise later on because of poor recordkeeping.

Call the Torrance estate planning attorneys at Samuel Ford Law for questions about what to do if you are named trustee of a trust.