Trust Administration Attorney in Woodland Hills, California

Many people think of trusts as something only the wealthy need to create, but just like a will, a trust is used to designate beneficiaries of your estate when you’re gone. The major difference is that a trust, unlike a will, does not have to be supervised by a probate court. This generally saves both time and money.

The most common form of a trust is called a living trust. While a will takes effect only upon your death, a trust takes effect immediately, with you as the trustee. The document will also name a successor trustee who will take over the administration of your assets should you become incapacitated or pass away.

The successor trustee should be someone whom you implicitly trust to carry out your desires as set forth in your trust document. While it doesn’t take a rocket scientist to administer a trust, the named trustee should understand the process and diligently follow all the steps required to successfully settle the estate and pass along assets to beneficiaries.

If you’re embarking on estate planning in or around Woodland Hills, California, and you want to know more about trusts and trust administration, contact me at The Law Offices of Kenneth W. Drake, Inc. I also stand ready to help if you’re administering a trust or if you’ve lost a loved one whose estate is now going through the administration process.

The Law Offices of Kenneth W. Drake, Inc. proudly serves clients throughout the San Fernando Valley, including Los Angeles, Ventura, and Santa Barbara counties.

Overview of Trusts

As mentioned above, living trusts mostly avoid probate proceedings, and the named trustee will oversee the process of settling the deceased’s estate. One’s estate includes all real property owned, along with cash assets, investments, and any family heirlooms mentioned in the trust.

Excluded are assets with named beneficiaries, such as life insurance policies, retirement plans, and real property held jointly with the right of survivorship.

Besides avoiding the time and costs of probate, a trust is also administered outside of the public eye. There are no courtroom proceedings or public records of the transactions involved in settling the estate.

The Role of the Trustee

Though a trust does not have to be administered under the supervision of a probate court, the trustee must still inform the probate court that the trust has become irrevocable (since the grantor, or original trustee, is now deceased). Under California law, beneficiaries and heirs then have 120 days to contest the terms of the trust. This is the first step.

The next step is to inventory all the deceased’s assets. If any of these assets are not included in the trust, then they will indeed have to go through probate court before being transferred to the trust. A pour-over will, which specifies that all assets should transfer to the trust upon death, can speed up this process.

The assets must then be appraised in value at the time of death. This is important not only for the later distribution to beneficiaries, but also should any taxes need to be paid. An appraiser may have to be hired in this step.

The trustee must also pay any debts due to creditors, along with taxes due. To pay the taxes, the trustee must obtain a tax identification number for the trust, which originally was recorded under the deceased’s Social Security number. Likewise, the trustee will have to set up a bank account in the trust’s name to pay debts and taxes. Liquid assets should be transferred into this account, and if any assets are sold, cash from the sales should be deposited there as well.

The trustee will no doubt run up administrative expenses in settling the estate, so these too will need to be paid before the distribution of assets can take place. These expenses can include payment for services like the appraiser and for other administrative tasks, including perhaps accounting and seeking legal advice.

The final step, when all else has been satisfied, is to distribute the assets to the beneficiaries named in the trust. If there are minor children involved, the trustee may have to set up additional trusts to distribute their shares.