Avoiding Probate With a Living Trust is not Avoiding Trust Administration

Creating a living trust is one of the most effective ways to set up the smooth transfer of assets from one generation to another, avoid the time and cost of the probate administration process, and eliminate or reduce certain tax burdens. Setting up a living trust, however, doesn’t avoid the process of trust administration.  

But what exactly is trust administration? Broadly speaking, it’s the process by which the assets of a trust are distributed to beneficiaries after the death of the trust creator. The successor trustee (often a surviving spouse) is responsible for overseeing the process by fulfilling a number of legal requirements as well as the stipulations included in the trust itself.  

Successor trustees are often surprised to learn that trust administration can be a complex process that doesn’t happen automatically. In most circumstances, the successor trustee is advised to retain counsel who is well-versed in the intricacies of trust administration. Typically, but not always, they turn to the attorney who drafted the living trust. Should that option be undesirable or unavailable, the trustee can hire any qualified lawyer who specializes in trust administration. The trustee and attorney will then work to implement the trust to meet both the wishes of the deceased and the obligations of the law throughout the trust administration process. 

Though every living trust is unique, the vast majority of them will require some sort of administration. Some of the most common trust administration steps include:  

  • Provide notice to beneficiaries 
  • Deliver legal notice of death to assessor’s office and claim any available exemptions
  • Identify all assets and resolve any ownership and/or title issues 
  • Value all assets
  • Determine income and/or estate tax requirements
  • Settle all debts
  • Distribute assets to heirs 

In addition to professionally administering the trust, counsel will guide the trustee and other vested parties through any legal issues that may arise during the trust administration process. Trust administration attorneys can provide counsel on asset ownership and title issues, tax issues, asset valuation and more. They also ensure that all assets are free and clear before they are disbursed to beneficiaries. 

Unlike probate, trust administration requires no court oversight. That means trustees and counsel can make the decisions that are right for their circumstances. They avoid the time and expense of probate while meeting the wishes of the deceased. In addition, the trust administration process provides increased privacy for resolving family and business matters. Should conflicts arise in the trust administration process, an experienced attorney will work to address them within the family or, if needed, pursue resolution through probate litigation. 

Serving as the trustee for a living trust can be a big responsibility that becomes more manageable with the legal guidance of a reputable counsel.  Together with your trust administration attorney, you can streamline the process to successfully distribute assets to heirs. 

Kevin Moore, Founder of Kevin J. Moore & Associates, is focused in the areas of estate planning, trusts and probate services with additional expertise in both domestic and international business transactions and tax planning and tax controversy representation for individuals and companies.