Trust administration refers to the process of “taking care of trust business” and typically refers to the time period after you die. (Technically, you administer your trust when you are alive and well or disabled, as well.) A trust attorney (also called an estate planning attorney or trust settlement attorney) guides the Trustees through the trust administration process. Trustees are your trusted helpers.
Who administers your trust while you are alive and well? ? While you’re alive and well, you likely will administer your own trust. You pay your bills, manage your investments, and make purchases just as if your assets were in your own name. You maintain full control.
Should you become disabled a trust attorney guides your disability trustees through the process of getting a Disability Certificate and managing your day to day business affairs because you cannot.
After your death, the trust attorney guides your death trustees (also called “settlement” trustees) through the final administration of your trust. This involves gathering and protecting your assets which will be relatively easy if your trust is fully funded, meaning your assets have been titled in the name of your trust. Your trustee will pay any outstanding bills and file the appropriate tax returns such as your last income tax return, an income tax return for the trust, and any applicable inheritance or estate tax returns. When all the bills have been paid and the tax returns have been accepted, your trustee distributes the trust assets to your named beneficiaries, following the instructions in your trust.
Often a trust sets up sub-trusts for beneficiaries so there is trust administration for each sub-trust. For example, you may leave your assets in a trust for your spouse to protect the assets from squandering in a second marriage or from lawsuits. After your spouse dies, it is typical for your assets and your spouse’s assets to go into trusts for your children. These involve trust administration and protect your assets from a divorce property settlement, a lawsuit, bankruptcy, and medical disaster.
If you have questions about administering any of these trusts, consult with a qualified estate planning attorney.