At Estate Planning & Elder Law Services, our team of legal and accounting professionals assist with every aspect of the trust administration process for many types of trusts. In recent years, living trusts have become an increasingly popular estate planning tool, as they allow people to exercise control over their assets both during life and after death, and keep those assets out of probate.
The person who creates the trust and funds it with their assets is called the grantor. The grantor can amend or revoke the trust at any time. After the grantor’s death, the trust becomes irrevocable. A successor trustee named in the trust takes over administration for the benefit of the trust’s beneficiaries. The successor trustee also takes over trust administration in the event that the grantor becomes legally incapacitated.
As a legal matter, anyone who is 18 or older and competent to manage their own affairs can serve as a trustee. As a practical matter, however, much more than those basic qualifications may be needed.
Duties Involved in Trust Administration
A trustee is a fiduciary, obligated to act in the best interests of others — in this case, the trust’s beneficiaries. A trustee has many duties, many of which may be complex and unfamiliar. The guidance of an experienced trust administration attorney can be invaluable in carrying out these responsibilities, which include:
- Interpreting the terms of the trust document
- Notifying beneficiaries of the existence of the trust and the trustee’s contact information
- Preparing an inventory of trust assets
- Preparing periodic accountings of trust activity for beneficiaries
- Settlement of creditor claims
- Responding to beneficiary inquiries
- Dealing with tax reporting agencies including the IRS and the Michigan Department of Treasury
- Preparation of tax returns, including final personal income tax returns, fiduciary income tax returns (for estates and trusts), estate tax returns, and gift tax returns
- Dealing with any litigation to which the trust is a party
- Management and distribution of trust income and assets
A trust administration attorney is experienced with the requirements of administering a trust in accordance with the terms of the trust document and applicable state and federal law. The services of a knowledgeable trust administration attorney can ensure that trustees meet their obligations in a timely fashion and avoid potential liability for mismanagement of the trust.
Professional Trustee Services
Often, the successor trustee of a trust is a family member or personal associate of the grantor, who may or may not also be a beneficiary of the trust. Sometimes, however, there is no suitable friend or family member who is willing and able to serve as trustee. In that case, it may be necessary to name a professional, such as an attorney, as successor trustee.
There are a number of advantages to appointing a professional trustee to administer a trust. Unlike a family member, a professional trustee is completely neutral and objective. There is no risk of self-interest or complicated family dynamics interfering with the administration of the trust.
A professional trustee is also experienced in the duties of a trustee, and can often carry out these duties more efficiently than a non-professional. Depending on the terms of the trust, this can result in a quicker distribution of trust assets to beneficiaries after the death of the grantor.
A professional trustee’s services may be particularly valuable when there are complexities involved in the administration of the trust, including significant assets or beneficiaries who are minors or have special needs.
The experienced Estate Planning & Elder Law Services offers trustee services for situations in which a trust would benefit from the objectivity and skill of a professional fiduciary.
Trust Administration Service for All Types of Trusts
While living trusts are one of the more common types of trust for which we offer legal guidance or professional trustee services, our attorneys can help administer many other types of trusts, including:
- Special needs trusts (also known as supplemental needs trusts)
- Irrevocable life insurance trusts
- Charitable trusts
- Spendthrift trusts
- Bypass trusts
- Generation-skipping trusts
Estate Planning & Elder Law Services has decades of experience in both the creation and administration of Michigan trusts. We are equipped to offer trustees as much or as little support as they need to successfully administer a trust, including providing “on the ground” assistance to trustees who reside outside the state of Michigan.
If you are looking for guidance about choosing a trustee and creating a trust, or have been appointed trustee of a trust and need help to carry out your duties, we are here to help. We invite you to schedule a complimentary consultation with a trust administration attorney by contacting us online or calling (888)PLAN-050.
With offices in Northville and Brighton, we practice throughout Southeast Michigan, including Livingston, Washtenaw, Oakland and Wayne Counties.