If you have just been named a trustee of a trust, or need to be involved in a trust in one capacity or the other, you might find yourself in some unfamiliar territory. Still, this is a significant responsibility to be tasked with, and the trustor must have held you in high regard to assign this role to you.
With this in mind, your next task is to learn all you can about this assignment and ensure you don’t miss a step in the process. This guide will help you do just that.
A trust is a legal document that provides a plan on how a person wishes their assets to be managed upon passing.
Here, a trustee is given the legal and moral responsibility to hold title to property for the benefit of the beneficiaries. Trustees must make decisions regarding the trust, adhering to what the trustor wanted and keeping it in the best interest of the heirs and beneficiaries of the deceased estate. The trustee is not allowed to use these assets for their self-interest.
A trustee is appointed by a trustor or settlor who owns the assets or property. This is done by placing assets or property into a trust and appointing a trustee to manage the trust.
A trust is essential for several reasons. These include the following:
Ultimately, both types of trusts outline how someone would want their assets distributed upon their death. Similarly, both are also excluded from probate, and their contents can be kept private.
However, the two have some differences.
For example, the trustor can amend a revocable trust to add or remove beneficiaries. On the other hand, an irrevocable trust is almost cast in stone, and any changes require approval from the beneficiaries and, at times, a court process.
Another difference is in timelines. A revocable trust can be canceled at any time by the trustor but becomes irrevocable upon the trustor’s death. Irrevocable trusts are permanent and remain as they are throughout your lifetime and after your death.
Lastly, revocable trusts are still subject to estate tax. Conversely, you can protect assets from estate tax by moving them into an irrevocable trust.
You can handle the trust administration yourself. However, as you shall see in the next section, having a Walnut Creek trust administrator to oversee the process would be useful.
Following the death of the settlor, your role as a trustee includes managing multiple functions. The main ones include the following;
Trust administration is no mean feat. Everything needs to be done diligently and accurately and calls for competency in different fields like negotiation, law, accounts, real estate management, investment portfolio management, etc. Over and above this, you are legally liable for managing the estate and can be taken to court for missteps.
Fortunately, trust attorneys are trained and experienced in managing trusts, whether as a one-off event or an ongoing process. While you are still expected to oversee this process, allowing a competent firm to handle it guarantees you that the trust will be executed properly.
Whether you are a trustee or a trustor looking to set up a trust, ensure your trust is administered properly. Speak with a trusted Walnut Creek trust attorney today.
Email Cindy’s Team at team@cindysayeghlaw.com
1211 Newell Avenue, Suite 130, Walnut Creek, CA 94596