Performing the duties of a trustee after the death of a loved one is an important duty. The good news is, you aren’t expected to start working immediately, because the tasks required of you are not of an emergency nature. However, within a month or so, you will need to start performing some of the preliminary tasks. This article will provide some basic information so you can survive your first six months as a trustee.
How long will it take to distribute the property?
Depending on the complexity of the trust provisions and the nature of the assets, you may be able to get all of your work done in approximately six months. However, if you have been called upon to administer an ongoing trust (such as a trust for minor children), then there will be continuous tasks. Still, most of the preliminary work can be accomplished in about six months.
How to get started as a Trustee
You may or may not be serving as the executor of the estate, as well as the trustee. If someone else is the executor, then you should stay in contact with that person during the first few months of your service. Typically, the executor will initiate a probate proceeding if it is required to ultimately transfer the estate’s assets to the trust.
The first few steps
Whether you are dealing with a simple trust estate or a complex one, here are the first few steps to fulfill your duties.
Handling Social Security Payments
The first thing to know is that you are required to return any payment received from Social Security for the month of your loved one's death, regardless of when in the month the death occurred. If your loved one died on the last day of the month, you must still return the entire amount of the payment. However, the payments are typically made for the prior month. So, the check for April would arrive in early May. If the social security payments are deposited directly into your loved one’s bank account you should keep the account open for a few months in order to allow social security to deduct the payment.
Stay organized
Your success at completing your duties will depend on your ability to keep organized. After marshaling all trust assets you should pay debts and distribute the remaining assets to the beneficiaries after providing an accounting that is approved by all beneficiaries. You should track all income and expenses for the trust for the accounting period (typically from date of death to date of distribution). The accounting system you use does not need to be complicated but you may want to invest in basic accounting software. A fiduciary income tax return is generally required if the income generated by the trust exceeds $600.00. Your estate planning attorney can assist you with completing all of your duties and limiting your exposure to liability.
If you have questions regarding trustee responsibilities, or any other trust administration issues, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.
The basic purpose of a trust in estate planning is to minimize estate taxes and avoid probate. What is a trust, exactly? It is a fiduciary agreement (one based on confidence and trust) between a trustee and the grantor (maker) of the trust.
The agreement authorizes the trustee to hold and manage the trust assets on behalf of the beneficiaries, and provides specific instructions on how to manage and distribute those assets. There are many different types of trusts, each with their own specific purposes or goals. So, how well do you know your trusts? Let’s find out.
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If you have recently been notified that you were named as a beneficiary in someone’s will, you may be curious about the probate process that will take place. Probate is a court process that can be lengthy, depending on the size and nature of the decedent’s estate. The court must first appoint a personal representative for the estate, and many other steps must be taken before the estate’s assets can be distributed to you and the other beneficiaries. Once all assets have been liquidated, how long does it take to distribute estate assets? There is no definitive answer to that question, but being familiar with some of the factors that affect the Nevada probate process can give you an idea of what to expect.
You may not have even considered that the location of the court handling the probate proceedings would have an impact on the length of the process. But, depending on how busy the court’s docket or calendar is, closing probate could take a long time. For example, courts located in crowded metropolitan areas will typically have a larger docket, which means it make take longer to get your probate matter scheduled. The opposite may be true for courts that serve smaller populations. The law requires that an estate must be probated in the jurisdiction of the decedent’s last primary residence.
One primary factor that affects the length of the probate process is the size and complexity of the estate. A large estate that has a variety of assets, such as real property, investment accounts, businesses and residences, will typically take much longer to complete the probate process. Also, the claims of all creditors against the estate must be heard by the court. Each has a right to a hearing, as well as to filing motions, as necessary. If there are any disputes regarding claims, the probate process will be extended.
In addition to the possibility of creditor hearings, if there are any disputes among the beneficiaries, the probate process will take longer. Estate law requires that all named beneficiaries be notified of the will, either by mail or personal service. Each beneficiary has a legal right to representation in probate court, as well as the right to have the court hear any motions to challenge or change the terms of the will. This means that beneficiaries will hire attorneys, who will collect evidence and bring it before the court to decide the disputes. If any beneficiaries live out of state, the process may take even longer.
Now, if you are the beneficiary of a trust, as opposed to a will, then it is very likely that there will be no need to go through the probate process to receive your inheritance. In that situation, you should be able to claim your inheritance quickly. The most common types of non-probated assets are those created by contracts and trusts, such as life insurance policies and annuities.
If you have questions regarding the probate process, or any other estate planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.
In Nevada, if the deceased person's assets exceed $20,000, or if there is real estate involved, probate is normally required.
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Possibly one of the most important decisions you make concerning your trust is who will serve as your trustee. The trustee has a duty to comply with the terms of your trust. These duties include distributions of income and principal, making prudent investment decisions, managing real property and exercising discretionary authority. While it is common for parents to name a child or trusted friend, there are other choices, such corporate trustees. The benefits of a corporate trustee should not be overlooked.
Why should I choose a corporate trustee?
A corporate trustee is a highly trained professional that can offer experience, stability, objectivity, and confidentiality. Most are insured and bonded. Also, many corporate trustees belong to a team of professionals from various disciplines that can assist and advise the corporate trustee on issues that might arise concerning the administration of your trust.
Experience
The trustee you select will be responsible for the financial well-being of the trust estate. This includes investment of trust assets. Your trustee must feel comfortable making investment decisions or choosing and supervising an investment manager, weighing and evaluating requests for distributions, which sometimes means making hard decisions. If your trustee is a relative or friend they may not possess the investment know-how or backbone to say no to a beneficiary's request for a distribution.
Your trustee must also be capable of maintaining adequate records, including accounting for the receipt and disbursement of income and principal from the trust. The trustee must also prepare and file all tax returns to the appropriate taxing authorities. A corporate trustee will keep abreast of the ever-changing tax laws and trust reporting and administration standards.
Stability
A primary purposes of stablishing a trust is to prepare for the future. So, it is important to remember that, over time, age or illness could potentially prevent your trustee from performing his or her duties. Although a successor trustee could also be named in your trust agreement, having the stability and continuity that a corporate trustee will provide, may be a preferred option.
Objectivity
The reality is, even in the perfect family, relationships can sometimes become strained. While your trust might be carefully written to explain your intentions and provide clear instructions, it may be difficult for a child or friend to avoid disputes and act objectively. With a corporate trustee, on the other hand, an objective third person will make decisions free from bias or influence from family or friends.
Confidentiality
Estate planning is inherently a delicate topic. Family relationships, financial status and other private matters are commonly involved. For most clients confidentiality is very important. The temptation of a trustee that is a relative or friend to discuss your private affairs may be too great. Inadvertent disclosures are also common with inexperienced trustees. You can be sure that a corporate trustee with keep your private matters confidential.
If you have questions regarding corporate trustees, or any other estate planning issues, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.
