Trust Administration and Litigation

Trust Administration You Can Count On.

Here is a quick Rundown of what to expect during a trust administration in California

Trust administration is the process that a trustee follows. According to the Trust’s terms, the assets in the document benefit the heirs and beneficiaries following the grantor’s death. Trust administration is a multi-step process involving mountainous paperwork and time-consuming court appearances. Working with a trust attorney can help streamline this tedious, complex process.

What is the differnece between a trust administrator and a trustee

A trust administrator can be the trustee, they are required to: collect the trust assets, ensure taxes and debts are paid, and then finally distribute the remaining assets to the beneficiaries. Alternatively, the trustee may hire an outside private or corporate trustee or may hire an outside private or corporate trustee service to administer the Trust. Essentially, a trustee coordinates the administration process.

California Trust Administration

The Following is a Trust Administration Checklist

Communicating about the Trust assets and its terms of distribution to the named beneficiaries.
Filing Federal and State fiduciary income tax returns.
Distributing the trust assets to the enlisted beneficiaries per the grantor’s wishes.
Protecting the assets in the Trust

First Off, give notice.

The California Probate code requires that trust administrators file, within 30 days after the death, the grantor’s will and death certificate to a Probate court. Record keeping is paramount.

Following that, beneficiaries and heirs should be informed within 60 days of the details of the Trust, including the Successor Trustee’s name and address. Following the notices, California law allows for 120 days for the beneficiaries to contest the terms of the Trust.California law allows for 120 days for the beneficiaries to contest the terms of the Trust. After the expiry of that period, beneficiaries may no longer be able to file a contest. see complete Probate code for exceptions

Please note:

*If a beneficiary files to contest the Trust and the courts agree that the Trust is invalid, the Trust may be legally repealed, and the intestate laws distribute the assets.

*If the courts deny the claim that the Trust is invalid, the trust administrator manages and distributes the assets per the stipulated terms.

Trust administrators should work with a trust administration attorney, especially when a beneficiary files a contest.

Successor Trustee- Manages Trust Assets

Successor Trustee – Manages Trust Assets.

If a contest is not filed within the period, the beneficiary may surrender their ability to file.

An essential step in the process is filing a notice of the grantor’s death with the county assessor’s office.

Initiating the change of title can be a lengthy procedure. It involves filling out change of ownership forms and filing affidavits. A trust administration attorney can help you through these steps.

Compile Other Remaining Assets

After transferring the title to the Trust, the administrator should identify other assets in the grantor’s estate plan-these range from investment accounts, second homes, and bank accounts.After filing and Affidavit of Death of Trustee, the successor trustee should identify other assets in the grantor's estate. These range from investment accounts, second homes, bank and stock account and other valuable assets. After filing and Affidavit of Death of Trustee, the successor trustee should identify other assets in the grantor's estate. These range from investment accounts, second homes, bank and stock account and other valuable assets. If any of these assets are not listed in the Trust, it may be necessary to file an action with the the Probate court. If any of these assets are not listed in the Trust, that may necessitate Probate.

The property consolidation process establishes what the grantor planned in the Trust and will and what they left out. Suppose the grantor left a pour-over will (which allows every asset to be automatically transferred into a trust). In that case, California laws require the Will to be Probated before the assets get transferred into the Trust in some cases.

Next, appraise assets

After you take inventory of all assets in the decedent’s estate , the next critical step is appraising them. An appraisal establishes the current value for proper distribution and tax purposes. Most likely, the terms of the trust outline the percentage distributions per the Trust of the decedent. Accurately accounting for all the assets for rightful distribution makes for smooth administration.
Settling the decedent’s debts and liabilities is, no doubt, a critical part of the process. You should notify the creditors, for example, credit card companies, that the grantor has died so they can stop charging interest on the amount owed.
The Successor Trustee should inform credit card report agencies (Experian, Equifax, and Transunion) that the person has died and that their social security number or name should not be used by anyone to obtain new credit.
The assets are no longer a part of the grantor’s estate regarding irrevocable trusts. But that’s not to say that creditors won’t try to come after the Trust. Our attorney's can help to shore up legal protections for the assets in the Trust.

The following is a checklist based upon the most common things that may or may not be required during the California trust administratoin process, our attorneys are experienced in guiding clients through this process.
Securing the living trust and the original will
Geting the name, address, phone and email for each beneficiary and heir
Contacting the decedent’s financial advisor and accountant
Determining whether you should hire an attorney to help you with the trust administration
Lodging the original will with the Probate Court
Submiting Notice of Death to the California Department of Health Care Services
Sending Probate Code Section 16061.7 Notice to the trust beneficiaries and heirs
Getting a Tax Identification Number (EIN) from the IRS for the trust
Preparing a Certification of Trust with the EIN
Identifying the decedent’s assets and values and determine how each asset is titled
Giveing the Certification of Trust to banks and financial institutions for them to add your name as trustee of the trust accounts with the EIN
Opening checking account in name of trust with EIN naming you as trustee
Identifying the beneficiaries of any retirement plans
Keeping a spreadsheet of all expenses incurred during the trust administration
Determining whether all the probatable assets are titled in the living trust
Or, if not, determining whether you will need to file a Heggstad petition with the Probate court
Determining whether you should liquidate the brokerage accounts, and if so, transfer the funds to the new trust bank account
Getting an appraisal of real property unless you intend to sell right away
If you intend to sell the home, getting the home ready for sale
Determining how to distribute and dispose of the decedent’s personal property
Determining if and when a preliminary distribution can be made to the beneficiaries
Determining the date of death value of the assets to establish the step-up tax basis
Determining whether a form 706 estate tax return should be filed
Determing the effects of California Proposition 19 issues affecting the property tax
Recording Affidavit Death of Trustee for each real property
Filing a Change in Ownership Report with the County Assessor
If the decedent’s children will keep the home, filing Claim for Reassessment Exclusion for Transfer between Parent and Child
Determining how much money to reserve in the trust bank account for future bills and expenses including taxes and tax preparation costs
Providing the beneficiaries with a trust accounting
Determining if a waiver of the 120 day period to contest the trust should be sent to the beneficiaries
Making the primary distributions to the beneficiaries
Filing the decedent’s final form 1040 personal tax return
Filing the form 1041 fiduciary tax return