Your First Six Months as a Trustee

October 2, 2015

first six months as a trusteePerforming 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.

  • Obtain death certificates for the decedent
  • Locate and file the original will with the local probate court
  • Identify and notify the trust beneficiaries
  • Inventory the trust assets and protect the trust property
  • Obtain a Federal Taxpayer Identification Number for the Trust
  • Transfer the trust property into your name as trustee
  • Review all trust investments
  • Establish a recordkeeping system
  • Obtain appraisals and valuations of the trust assets as of the decedent's date of death

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.

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