A Step-By-Step Guide to Implementing a Trust Administration Checklist

It can be challenging to know where to start if you are a first-time trustee. 

Having the correct guidance can make the process go much more smoothly. It will also help you avoid mistakes and save you time.

Determine the Trustee’s Duties

trust is a document in which one person, called the grantor, conveys property to another party. This trustee is then tasked with safeguarding those assets for the benefit of the beneficiaries.

Whether a new trustee or a seasoned professional, you must understand your duties to perform them effectively. Specifically, a trustee’s duties include collecting, managing, and investing assets, income, and principal under the trust.

The trustee is also responsible for keeping all trust assets separate from their personal properties and accounts. It includes maintaining all investments, banking, and checking accounts under different names.

Additionally, a trustee must follow the investment standards outlined in the trust agreement. These standards dictate that investments must be prudent, meaning that they must be based on the current and future needs of the beneficiaries.

A trustee must adhere to these investment standards to avoid losing money and suffering other negative consequences. They should seek the help of a financial adviser, CPA, or skilled trust lawyer at this step to ensure that their investments align with the trust administration checklist.

A trustee’s duties also include reporting and accounting to beneficiaries of the trust unless they waive these obligations. Trustees must make sure that all trust records are organized and easily accessible and that they provide periodic accountings to beneficiaries if requested.

Obtain Legal Documents

Once you have been named trustee, it is time to start administering the trust. While this can be an overwhelming task, there are steps you can take to ensure the process goes smoothly.

First, you should obtain all legal documents associated with the deceased person’s estate. It includes their last will, life insurance policies, powers of attorney, and other documents related to the person’s assets.

Getting these documents is the first step to administering a trust. Once you have them, you can collect the assets in the trust.

Please also prepare a detailed accounting of the assets. It will help you to identify any debts and liabilities that may need to be paid before distributing the assets.

In addition, you should submit claims on any insurance policies associated with the trust. It will help you ensure the trust is covered and the beneficiaries can receive their benefits.

You should also get copies of the original trust document to give to anyone you entrusted with handling the trust’s assets. It includes your successor trustee and any custodians you appointed to manage the property of young beneficiaries.

Manage the Trust Assets

The trustee of a trust has a fiduciary duty to manage the trust’s assets following the wishes of the person creating the trust. It means the trustee must safeguard the trust assets for the grantor or beneficiaries, file tax returns, and more.

A trustee must also be careful to keep records that prove their actions as trustees. It includes a thorough accounting of all expenses, spending from accounts owned by the trust, and other details.

To protect the trust assets, a trustee must prudently invest them. They cannot let investments sit idle or invest in something overly risky, as this could cause the assets to be lost.

Once the trustee has done this, it is time to inventory the trust assets and their values. It will allow them to determine the best action for distributing the trust assets to the grantor’s beneficiaries.

Lastly, it is essential to locate any documents the grantor left behind about their healthcare wishes and how they wanted their assets distributed upon death. These documents may include a medical power of attorney and living will.

Managing trust can be complex, but there are a few things that you can do to help make the process go smoothly. The first step is to contact a trust administration lawyer, who can answer your questions and walk you through the process. They can also recommend a network of accountants, bankers, and other professionals who can help you.

Communicate with Beneficiaries

You may need to figure out where to start if you are a new trustee and have never been in charge of a trust before. This checklist will help you create your new role as a trustee, from determining your duties to managing the trust assets.

Communicating with beneficiaries is a significant part of the trust administration process. Keeping beneficiaries updated about the estate’s progress will ensure their peace of mind and confidence in your abilities to manage the trust property as efficiently as possible.

It is a good idea to inform beneficiaries of any significant developments, like when you receive an offer for the house or sell it. Similarly, checking in with them when you make any distributions from the trust is essential.

Beneficiaries have a right to request information from the executor. If the executor fails to respond or provide sufficient notice, they have the right to file a petition in the probate court to force the executor to do so.

Learning a beneficiary’s communication preferences from day one is a good idea to make the process easier. It will help you understand how they want to communicate and be communicated with, whether by email or text or if they have special needs and prefer more reminders.

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