Trust Administration
TRUST ADMINISTRATION PROCESS
The Trust and related documents avoid the need to formally probate properly transferred into Trust. Any assets not properly transferred into the Trust must go through the Probate Process (SEE Section on Probate). However, the death of the Grantor still triggers certain events requiring formal action. The duties of a successor trustee are very analogous to the duties of a personal representative. The functions which are described here are often referred to under the term "settling the estate".
TRUSTEE
A trustee is classified in the law as a "fiduciary". A fiduciary is a person who has been selected for a position of special faith, trust and reliance. As indicated above, a personal representative is another type of fiduciary and the duties and responsibilities which you have in the settlement of this estate are quite similar to the duties and responsibilities that a personal representative would have in the Probate process.
At this stage of the Trust administration, the Successor Trustee is entitled to possession and control of all of the assets of the Trust estate. Their duty is first and foremost to protect and preserve the assets of the Trust and also to see that the assets are invested in a prudent and cautious manner. The persons to whom the Successor Trustee owes these duties are, first, any creditors of the estate (including any tax authorities), and secondly, the beneficiaries of the estate. If their duties are not properly or competently performed, they may have to answer to any of these persons who have been harmed as a result.
Starting the process of administration of the Trust, or settlement, depending upon the term you prefer, begins with the Successor Trustee filing certain documents in the Public Records, announcing the Grantor Relationship=s death, and confirming the Successor Trustee’s status as Trustee and their acceptance of that status.
TRUST ACCOUNTING & TRUST TAX RETURN(S)
Florida Statute 736.0813 imposes an affirmative duty on a trustee of an irrevocable trust to account to beneficiaries, both annually and on termination of the trust or on change of trustee. A fiduciary accounting discloses more than the income and expenses treated in the Fiduciary Income Tax Return (Form 1041). In addition to disclosing income and expenses, the fiduciary accounting would also disclose: the nature and amount of assets, both at the beginning of the accounting period and at the end; all cash and property transactions; significant transactions; and with the final accounting, a plan of distribution of remaining assets. We have an ON-SITE Accountant and legal team to help you prepare your required Trust Accounting and Trust Tax Returns.
TAX ISSUES
Another stage in the proceedings in the estate is the determination of various tax returns which may be required by law to be filed for the estate. There may be many required tax returns; however, the most common are income tax returns for the decedent, income tax returns for the Trust, if the Trust has more than $600.00 in income during its tax year, and an estate tax return, which is required by law to be filed if the total taxable estate exceeds a certain valuation.
*SEE Section on TRUST AGREEMENTS
Similar to administering an Estate through the Probate process, a Trust Administration can be sometimes be confusing and complex. There are certain documents and notifications you must file to be in compliance with the law. Please do not hesitate to contact our office at 321-773-9679 to discuss these important matters or if you have questions or concerns.
TRUST AGREEMENT
Trusts are commonly used in estate planning, to plan for incapacity or disability, and after your death. The type of trust most commonly used is the revocable grantor trust, revocable living trust, or just revocable trust. A trust is a legal fiction or entity that owns property through its agent – the Trustee. After signing your Trust, you must fund the Trust by transferring certain real estate into the Trust (by way of a Deed), and changing the title of bank accounts, broker accounts, bonds, securities and other property into the name of the Trust.
A trust directs what should happen to your property in the event of your incapacity and/or death, with a minimum of difficulty, much privacy and without the need for court intervention. While alive, you remain in control and can change the trust at any time. If you were involved in an incapacitating event, your family may be forced to seek appointment of a guardian or conservator, if you lack a durable power of attorney or trust. A funded revocable trust would be extremely useful because your successor trustee could intercede and administer the trust for your benefit, without the need for court intervention.
After you pass away, the revocable trust still owns the property. Creating a revocable trust allows for the avoidance of the expense, delays and public aspects associated with probate. Upon your passing, your assets provide for your debts and final expenses, with the remainder distributed to your beneficiaries according to your instructions and without court involvement. In this way, your Trust would replace your Will.
