Trust Administration Following the Grantor’s Death

After a grantor’s death, trust administration follows a structured process outlined in the trust document and governed by state laws. The process ensures that the assets are managed and distributed according to the grantor’s wishes. The steps involved in administering a trust can vary depending on the type of trust, its terms, and the jurisdiction in which it was created.

Notification and Identification

The trustee is an individual or a corporate entity appointed by the grantor. The trustee’s primary responsibility is to carry out the grantor’s wishes, ensuring that beneficiaries receive their intended distributions under the terms specified in the trust. After the trustee is informed of the grantor’s death, they accept their role.

The next step is to identify the beneficiaries of the trust. Beneficiaries are those named in the trust document and entitled to distributions from the trust’s assets. After identifying the beneficiaries, the trustee must notify them of the grantor’s death and provide information about the trust’s administration.

Inventory of Assets

The trustee is responsible for inventorying the assets held in the trust. The trustee collects all relevant documentation related to the trust’s assets. This may include copies of the trust document, bank statements, investment account statements, deeds for real estate properties, vehicle titles, stock certificates, insurance policies, and any other records that indicate the trust’s ownership or control of assets. The trustee identifies each asset held within the trust, including tangible assets, such as real estate, vehicles, artwork, jewelry, and collectibles, as well as intangible assets, like bank accounts, stocks, bonds, mutual funds, retirement accounts, and intellectual property rights.

Valuation of Assets

Once all assets have been identified, the trustee must determine their value. This may require obtaining professional appraisals for certain assets. Assets like real estate, artwork, jewelry, or collectibles may require a professional appraisal to determine their value. Other assets may be valued based on market prices or account balances. Financial assets such as stocks, bonds, mutual funds, and retirement accounts are typically valued based on their current market prices or account balances at the time of the grantor’s death. The trustee may consult financial advisors or use reputable financial data sources to obtain accurate valuations for these assets.

Payment of Debts and Expenses

Before any distributions can be made to beneficiaries, the trustee identifies all debts and expenses associated with the trust. This includes outstanding debts owed by the grantor at the time of their death and any expenses incurred during the trust administration process. Common debts and expenses may include:

• Funeral expenses and burial costs
• Outstanding bills and invoices
• Mortgage payments, property taxes, and utility bills
• Legal fees and accounting costs
• Trustee fees and administrative expenses
• Taxes owed by the trust or the grantor’s estate

Once debts and expenses have been identified, the trustee prioritizes payments based on their urgency and importance. Certain obligations, such as funeral expenses and taxes, may need to be paid promptly to avoid penalties or legal consequences. The trustee may consult the trust document or legal and financial advisors to determine the appropriate order of payment. If the trust lacks sufficient assets to cover all debts and expenses, the trustee may need to communicate with creditors to negotiate payment arrangements or seek concessions. Throughout the process of paying debts and expenses, the trustee maintains detailed records documenting all transactions and communications. Accurate record-keeping is essential for demonstrating compliance with the trust document, fulfilling fiduciary duties, and providing transparency to beneficiaries.

Distribution to Beneficiaries

Distributing assets to beneficiaries is one of the trust administration’s final and most significant steps. This process involves transferring ownership or control of trust assets to the individuals or entities named as beneficiaries in the trust document. Depending on the instructions provided in the trust document, distributions to beneficiaries may be made in various forms. Common distribution methods include outright distributions of assets, ongoing trust distributions, or a combination of both. The trustee follows the guidelines outlined in the trust document to determine the appropriate method for each beneficiary.

Accounting and Reporting

The trustee must keep accurate records of all transactions related to the trust and provide periodic accountings to the beneficiaries. These accountings detail the trust’s assets, income, expenses, and distributions. Once all debts and expenses have been paid, the trustee prepares a final accounting of the trust’s financial activities. This accounting details the income received, expenses incurred, distributions made to beneficiaries, and any remaining assets in the trust estate. The final accounting is provided to beneficiaries for review and approval before the trust administration is concluded.

Trust Termination

Once all distributions have been made and the trust’s purpose has been fulfilled, the trust can be terminated. The trustee resolves any outstanding matters related to the trust administration, such as finalizing tax filings, settling any remaining debts or expenses, and addressing any disputes or challenges arising during the administration process. The trustee closes any bank, investment, or other financial accounts, ensuring that all outstanding balances are reconciled and distributed. The trustee prepares and files any necessary paperwork to formally terminate the trust under legal requirements. Once the trust has been officially completed, the trustee notifies all interested parties of the trust’s termination.

The Bratton Law Group Is Here to Help

Are you a trustee responsible for managing a trust? Do you require professional assistance in navigating the complex process of trust administration? Look no further. The experienced team at the Bratton Law Group is here to provide comprehensive and reliable services tailored to your needs. With years of expertise in estate planning, probate, and trust administration, we offer trusted guidance and support every step of the way. Contact the Bratton Law Group at 856-770-2744 to schedule a consultation today.