Client Success Stories

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Need Probate?

Have you been told that you need “Letters Testamentary” in order to access your loved one’s accounts? Then that generally means that the institution you are dealing with needs legal documentation from the probate court.

Generally, a probate is required when the person who passes away holds title to assets in their name alone which have a cumulative value in excess of $100,000.

Typically, the following assets would NOT need to go through a probate: (1) Assets held in joint tenancy (if the remaining joint tenant is still alive); (2) Accounts held as “Pay on death” or “in Trust for” accounts; (3) Retirement accounts which pass to a living designated beneficiary; (4) Life Insurance proceeds which pass to a living designated beneficiary; and (5) Assets titled in a Trust. (more)

Trust Administration

imageIf a person dies and they have a Trust, then the successor Trustee, named in the Trust, must “administer” the Trust. They read the Trust and follow all of the instructions in the Trust; they must also follow all of the state and federal laws that impact the decedent’s estate. This is called a Trust Administration or a Trust Settlement.

The process for administering a Trust is similar to a Probate in many important ways; however, the biggest difference is that a Trust Administration is a private process whereas a Probate is a court-supervised process.

What does a Successor Trustee Do?

A Trustee’s basic duties involve the collection, management and investment of Trust assets, and the accumulation and distribution of income and principal pursuant to the Trust Agreement.

There are notices that have to be given to all beneficiaries under the Trust and to all the heirs of the decedent. The Trustee has to make a complete inventory of all of the assets of the Trust. Normally, the assets have to be re-titled in order to take into account the fact that the Trust is now administered by the successor Trustee. An Estate Tax Return may be required to be filed.

The principal source of the Trustee’s powers and instructions is the Trust Agreement itself, which should be read carefully.

Can a Trustee be Held Liable if they Fail in their Duties?

imageA Trustee acts in a fiduciary capacity in the administration of a Trust, owing certain legal duties to the beneficiaries.

If the Trustee exceeds their powers, they may be held liable for loss or damage to the Trust Estate. It is essential that the successor Trustee obtain legal advice in order to properly administer the Trust and be protected from liability to the beneficiaries.

What if a Trustee Needs Help In Administering the Trust?

The Trustee often hires attorneys, accountants, and investment advisors to consult with concerning the administration of the Trust, and may pay such advisors from the assets of the Trust. Our firm can assist you in your fiduciary duties as Trustee, and advise you on administering the Trust according to the Trust Agreement.

Does every Trustee have to Receive a Fee?

Often the trust document will provide for a “reasonable and customary trustee’s fee” as permitted by state law, so that the trustee will be incented to take on the responsibility and be compensated for their work.

What do Trustees Charge?

It depends. If the trustee is a bank or large institution, they will have their own fee schedule, and the amount charged will vary depending upon the extent of the services that they provide. In general, however, a trustee’s annual fee runs from 1 – 2 percent of the value of the assets being administered, depending upon the complexity and amount of work involved. Often, family members and close friends who are named as trustees will agree to forgo some or all of the fees they would ordinarily receive.

Even if the decedent did not have a Living Trust, formal Probate proceedings may not be necessary upon the death of a love one. However, in all cases involving death, the family members should contact an Estate Planning and Trust Administration attorney to make sure that their property rights are protected and that the assets of the decedent are properly transferred to the rightful heirs.

Learn More about what to do if you are a Trustee of someone else’s Trust:
Request our “Executor and Trustee Protection Guide” here;
Request an individualized Case Review here or contact us at 949.260.1400.