Administrative Duties And Responsibilities of Trustees
The following list of duties and responsibilities of Trustees is not intended to be all-inclusive, as there are many different kinds of Trusts and many specialized provisions in Trusts that require special responsibilities. This list deals with a Trust under which the Grantor (“Settlor”) has died, and the Successor-Trustee or Co-Trustee has to take over administration of the Trust.
1. Review Trust Declaration and Amendments
2. Marshall Trust Assets and identify all Beneficiaries
3. Determine Probate Filing Requirements (as to creditors, taxes, and special property)
4. Locate and file the original Pour-over Will and related Codicils in Court
5. Implement Successor or Substituted Trustee Authority
6. File Trust Probate Pleadings in Court (have Personal Representative appointed)
7. See that prior Trustee(s) fulfill prudent investor responsibilities, involving protection of Trust investments
8. Fulfill ongoing record-keeping and accounting obligations
9. Take all steps to protect, insure, and manage Trust assets
10. Determine contributions due to Personal Representatives for payment of administration expenses, taxes, creditor claims, etc.
11. Satisfy notice requirements as to Trust beneficiaries and creditors
12. Determine payments and/or settlement of creditors’ claims
13. If creditor(s) file objectionable claims, file and serve timely objection(s)
14. Confer with tax-return preparer (CPA preferred in most cases) to ascertain status of all taxation issues (see next item)
15. Identify tax returns required to be filed by Trustee(s); establish due dates and see that there will be adequate liquidity to meet all tax obligations
16. Determine order of payment of expenses of administration and obtain contribution from Settlor’s estate to meet said expenses
17. Distribute income and principal to Beneficiaries and fund further Trusts (if required)
18. Address income distribution issues as to simple and complex Trusts (to avoid excess taxation at marginal Trust–taxation rates)
19. Provide legal instruments to effect distribution (such as Trustee’s Distributor Deed, etc.)
20. Obtain Receipts and Refunding Bonds from all Trust beneficiaries
21. Prepare Fiduciary Income Tax returns (1041s) and provide notices (K-1s) to beneficiaries
22. If Trustee is sole beneficiary, appear in court for final hearing before discharge of Trustee
23. Maintain liaison with Personal Representative, so that estate remains open during extended periods for tax-closing letter and/or other issues that may require extending administration.
24. Obtain Trustee’s Discharge as to liability for Trust Administration.
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Depending upon the nature of the Trust assets and the value of the gross estate (including both probate and non-probate assets) many of these duties may be expanded, and some may be omitted. For example, steps may have to be taken to protect, insure, manage, and then actively market and sell any real property. Contested creditor’s claims may involve separate litigation or mediation. Where special types of additional Trusts must be established (i.e., for minor or special-needs beneficiaries), these separate Trusts require secondary administration.
For sizable estates (in excess of the Federal estate-tax threshold) advanced post-mortem estate planning may be necessary. This should be considered in conjunction with the Personal Representative(s) of the estate, and may require assistance and cooperation from tax accountants and the estate’s attorney.
Contact Feldman & Feldman, Counsellors at Law, P.A.
To discuss the responsibilities of a trustee with an estate planning attorney, schedule a consultation by calling 954-227-7320 or filling out our online contact form.