Creating and administrating trusts can be a complicated and taxing process, which is why it’s important to contact a knowledgeable trusts and estates lawyer to help guide you through the process. Below, a DC trusts and estates lawyer discusses some basics about trust administration and the important things to know.
Role of Trust Administration Lawyer
An attorney’s primary role is to advise the trustee of their duties regarding the trust and to advise on the proper administration of the trust. For example, a trust administration attorney in DC can assist with titling assets into the trust or creating a plan for distribution from the trust. An attorney may advise a client about the necessary estate tax returns that need to be prepared by the trustee as part of his role. An attorney will not advise on the financial aspects of investing the assets of the trust, but may help to create a plan for distribution or funding and defunding the trust.
What is Trust Administration?
Administration of a trust is a broad term that describes the management or enactment of the provisions of the trust. The nature of the trust determines when the administration occurs. For example, a testamentary trust would not be administered until after the death of the grantor, while a revocable living trust is in existence during the lifetime of the grantor and can be used for his or her benefit.
The administration involves ensuring all the assets are titled correctly into the trust, managing those assets pursuant to the provisions of the trust, preparing and filing any required tax returns and making distributions according to whatever the trust terms provide.
The administration of a trust is primarily dependent on what the terms of the trust agreement. For example, the trust may require that the principal of the trust stays in the trust for the lifetime of the grantor’s children, and the principal is to only be distributed to grandchildren. Another client may choose the principle to be distributed at staggered ages to their children. These are just a few examples to show how the duration of the trust administration and the nature of the trust administration could change depending on the terms of the document itself.
Choosing an Attorney
You can choose an attorney at any time during the administration of the trust. However, if you have a good relationship with the attorney that drafted the trust, that attorney would likely have the most knowledge regarding the purpose of the trust and your family dynamic. If the attorney that created the trust is retired or unavailable, an experienced trusts and estates attorney can advise you either in your role as a trustee, or as the beneficiary of a trust.
It is most important to work with an attorney who has experience with drafting, funding, and administering trusts. The attorney should be someone who you trust to advise you in your capacity as trustee or your rights as a beneficiary.
It is important to understand that trust administration is dictated by the document itself. Although there is some leeway for a trustee regarding how the assets are financially managed, the trust provisions dictate the length of the trust, and the nature of the distribution of the trust assets.