Trust Administration

There are many kinds of trusts. Two main categories of trusts are revocable and irrevocable. A "living trust" is a revocable trust established and funded during your life. One benefit of a living trust is that the assets in the living trust will pass directly to the beneficiaries at the owner's death, without going through the Probate Court. This is called "avoiding probate." (Similarly, insurance proceeds and IRA benefits pass directly to the named beneficiary without probate.)
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Living trusts have become very popular in recent years. Trusts were previously used mostly by the rich and those with special needs, at least in popular perception. Consequently, they were administered most often by banks as trustees. Now many people have living trusts for more modest assets, and the owner is usually the trustee, with a family member as successor trustee after the owner's death. The family member usually needs some assistance with the winding up process. That is where we come in.

Even though the living trust assets don't go through probate at the owner's death, they must still be collected, valued, reported for estate tax purposes, distributed, and their income reported for income tax purposes. This process is "trust administration."

Sometimes the owner of the living trust does not want the trust assets distributed outright after his or her death. For example, the surviving beneficiary could be a spouse or minor children or even adult children for whom the owner wants to leave the assets in trust for management, tax or other reasons. When the trust will continue for the beneficiary's life and the beneficiary will not be able to withdraw these assets unilaterally, the trust is an irrevocable trust.

In this case, the trustee will manage the trust for the beneficiary's life, keeping track of income and principal, making distributions, filing the trust's income tax returns, and usually having the investment responsibility. Our role in such a case is to assist the trustee, as requested, with any legal issues that might arise, such as assuring that the beneficiary receives sufficient income.