If someone who has developed and properly funded a living trust passes away, this generally avoids the need to petition the court for a probate of his or her estate in Orange County. Instead, the Successor Trustee is empowered under the trust document, to carry out the terms of the trust, without the high costs and delays associated with court procedures. Carrying out the terms of the trust is called trust administration. Our office routinely assists Successor Trustees in this process, both for past clients, and those who did not develop their plan through our office. With respect to the trust administration process, our Orange County probate attorney, has developed a system and relationship with the client which dramatically lowers the overall costs involved.
WHAT HAPPENS DURING A TRUST ADMINISTRATION PROCESS?
Under California law, the Successor Trustee is not only required to carry out the terms of the trust as stated in the document, but he or she is also required to perform various duties as Successor Trustee.
Initially, certain notifications to individuals and entities must be made in accordance with the provisions of the California Probate Code. For example, notice must be formally served on all trust beneficiaries and heirs at law, and the notice must be in the form prescribed by the probate code. These notices must be sent within 60 days of the date of death. Formal notice must also be given to the Department of Health Care Services, and possibly other governmental agencies. Failure to make these notifications could subject the Successor Trustee to liability.
The Successor Trustee must also make sure the Last Will is filed with the proper court, and if there is any real estate in the trust, steps must be made to clear title to those properties in the name of the Successor Trustee.
It is also the job of the Successor Trustee to gather and protect all trust assets, to pay all creditors of the estate, and to make sure all tax issues are properly addressed. The trust may require a separate taxpayer identification number, also. Once all of the administrative tasks have been completed, appraisals have been made, all bills have been paid, and all tax returns have been filed, the Successor Trustee may then distribute the assets of the trust to the beneficiaries, in accordance with the terms of the trust. Read more about orange county estate planning lawyer.
WHAT IF NOT ALL ASSETS ARE IN THE TRUST?
Some assets which are not in the trust may not present a problem, if they have named beneficiaries, and those beneficiaries are living. However, if you discover that the decedent failed to place certain assets in the trust prior to death, those assets may become subject to the probate process, if the value of all of them combined is greater than $184,500. If the value is less, there are less complicated strategies we can use to collect those assets.
WHAT IF THE TRUST SPLITS INTO SUBTRUSTS UPON DEATH?
Sub-trusts are especially common in administration s of trust established by married couples. The married couple may have developed a plan for the purposes of tax planning, known as an AB or ABC trust. This ensures that when the first spouse dies, the deceased spouses assets remain available for use by the surviving spouse, but in an irrevocable trust. These types of trust are more complicated to administer, and you would be well advised to receive proper advice regarding the process.
In addition, some trusts have minors trusts for minor beneficiaries, special needs trusts for special needs beneficiaries, or other ongoing trust which survive beyond the death of the trustmaker. These trusts all have their own unique requirements with respect to the trust administration process.
HOW MUCH DOES TRUST ADMINISTRATION COST?
Because the overall cost of administering a trust estate is dependent upon many variables, it is difficult to set forth a range of potential costs, however, the cost of administering a trust is only a fraction of the cost of a probate. And, as noted above, our firm has developed a system of administering trust estates which drives those costs even lower. Finally, a trust can generally be administered in only a fraction of the time it takes to conduct a probate.
Please be advised that the information on this site is not meant to be construed as legal advice, nor is it meant to set forth all of the various responsibilities of a Successor Trustee. As such, you are strongly advised to seek legal advice if you are the Executor under a decedents Last Will, or if you are the Successor Trustee under a decedents trust.