Being named a trustee, executor, or estate administrator can seem like an overwhelming task. These individuals are entrusted with significant duties and can incur liability for failing to carry out those obligations. Fortunately, you can turn to the professionals at SederLaw. Our trust and estate administration practice helps trustees, executors, and administrators ethically carry out their duties so the trust or estate can be properly closed. We also represent heirs and beneficiaries in claims in which these trustees and others fail to properly exercise their responsibilities.
Trust Administration: Rights And Responsibilities
Trusts are established to avoid probate, minimize taxes, and accomplish other important estate planning objectives. The trustee is the person responsible for administering the trust for the beneficiaries. As a fiduciary, the trustee is required to act in the best interests of the beneficiaries, putting their concerns at the forefront of all decisions made.
More specifically, in administering the trust, the trustee is obligated to do the following (among other tasks):
- Identify and take control of all trust assets and property
- Obtain appraisals of the trust assets
- Notify all beneficiaries of the grantor’s (also known as trustor’s) death
- Notify banks and other financial institutions of the grantor’s death
- Manage and preserve all trust assets according to the terms of the trust
- Distribute assets to beneficiaries according to the terms of the trust
- Open a bank account for the trust
- Make prudent investments of trust assets for the beneficiaries’ benefit
- File all necessary taxes
- Pay the grantor’s final expenses from the trust assets
- Pay other expenses as needed, e.g. accountant fees
These and other duties are essential aspects of the trust administration process. Additional obligations may be imposed upon the trustee according to the terms of the trust.
The Importance Of Proper Trust Administration
Failure to properly administer a trust can have serious consequences for the trustee. For example, a trustee may be accused of making unwise financial investments with trust assets, causing substantial financial losses for the beneficiaries. This opens the door to potential litigation that could result in the trustee being held liable.
Lawsuits against trustees generally involve allegations of breaching the above-listed fiduciary duties. For example, a trustee could be accused of:
- Making poor investment or financial decisions
- Failing to preserve or protect trust assets
- Allowing trust assets to go to waste or be stolen
- Misappropriation of trust assets for personal use
- Acting in the trustee’s own interests, e.g. self-dealing
- Improperly favoring one beneficiary over another
If you’re a trustee accused of these or other actions, you will need strenuous legal defense to protect your rights. On the other hand, if you’re a beneficiary and suspect the trustee is acting improperly, it’s also imperative to retain experienced legal counsel. SederLaw represents both trustees and beneficiaries in litigation over trust administration.
Our firm can also ensure that, as a trustee, you carry out your responsibilities according to your fiduciary duties. We will review the trust terms, explain your obligations under the law, and then get to work helping you administer the trust.
The Basics Of Estate Administration
A decedent’s last will and testament will identify the executor who will be responsible for managing the estate. On the other hand, if a person dies without a will, the probate court will appoint an administrator to carry out these same duties. The individual who manages the estate, whether executor or administrator, is sometimes known as the estate’s personal representative.
The process by which the estate will be administered is known as probate. The essential purpose of probate is to transfer property and assets belonging to the estate to the rightful heirs of the deceased. It also involves paying valid final expenses to creditors and taxing authorities.
Probate is a complicated and time-consuming procedure, and there are strict guidelines and timelines for ensuring it is carried out properly. These are a few of the basic steps:
- File a petition with the probate court
- Notify heirs that probate has been opened
- Allow heirs the chance to object to the validity of the will
- Appoint the executor, also known as the personal representative
- Organize and prepare an inventory of estate assets
- File final estate and income tax returns
- Ensure legitimate creditors are paid for the decedent’s final debts
- Distribute assets according to the will
These steps are largely similar to those required if the decedent died without a will, known as dying intestate. The primary difference is that the distribution of assets to the heirs will follow a procedure laid out in state law.
Legal Assistance For Executors, Administrators, And Heirs
Similar to the work we do on behalf of trustees, we can assist personal representatives carry out their duties in managing the decedent’s estate. We can handle the probate process from start to finish so creditors can be paid, heirs can receive their assets, and the estate can be closed.
On the other hand, if you’re an heir who believes an executor or administrator is abusing his or her authority, we can also assist. We represent heirs in actions to remove personal representatives, recover stolen or misappropriated assets, and take other actions as necessary.
Contact Our Trust And Estate Administration Attorney
Serving as a trustee, executor, or administrator is an honor and provides a valuable service to heirs and beneficiaries. But the process can be fraught with legal risks as well. And those who are to receive assets from a trust or estate sometimes need dedicated legal counsel to protect their rights. Whatever your trust and estate administration needs, SederLaw is prepared to represent and advise you. Contact us today.