The Role of a Trust Administrator: Legal Duties and Best Practices

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Trust Administration

When utilizing a trust as part of your comprehensive estate plan, you’ll want to ensure that the legal requirements and your wishes are being met as expected. What is the role of a trust administrator?

A trust administrator is appointed to assist with the administrative aspects of the management of the trust. Trust administrators are typically professionals hired to oversee several tasks to ensure the trust complies with legal requirements and is handled appropriately based on the creator’s wishes.

Who is a Good Candidate for a Trust Administrator?

A trust administrator can be an entity or an individual appointed to regulate and oversee the trust after the creator’s death. Trust administrators are typically professionals who have thorough experience in tax compliance, accounting, legal knowledge, record-keeping, and more.

Trust administrators also have to have extensive knowledge of relevant tax laws and regulations to ensure that all actions taken regarding the trust are legal, regardless of the trustee’s choices.

Trust administrators also may need to resolve disputes regarding the administration of the trust as they arise, so they will need to be professional and capable of handling negotiations.

A trusted individual can be named the trust administrator, or an entity such as a trust management lawyer, a bank, or a trust management company may be used. This role is entrusted to have a duty of care to the trust’s beneficiaries within legal parameters.

Typical Duties of a Trust Administrator

Though each role will vary slightly based on the instructions within the trust, most trust administrators are tasked with the following requirements;

Trust administrators are to determine the trust’s total value by assessing the assets within and keeping track of them. While some assets are investments, the total value will fluctuate over time, and they must keep a current record of the total value to share with relevant parties such as the beneficiaries.

Keep beneficiaries in the loop of all the actions being taken regarding the trust. In a supportive role, a trust administrator can ensure that all relevant parties are kept abreast of essential actions and decisions being made regarding the trust to alleviate conflicts or questions that may arise.

Filing income tax returns is another typical duty that trust administrators will have. By keeping a watchful eye on tax-relevant happenings throughout the year regarding the trust, the trust administrator can ensure that all actions are compliant, and they can prepare to file the appropriate taxes of the trust as necessary.

Investments within the trust – as some trusts are comprised of investment assets, trust administrators can oversee investments to ensure that they are profitable and performing in a way that will benefit the trust overall.

Serious Responsibility

The role of a trust administrator comes with a multitude of tasks that require significant attention throughout the life of the trust. Those who take on the role of a trust administrator must devote considerable time throughout the year to ensure that all aspects are handled within legal compliance and in the trust’s best interest.

Their time can be spent overseeing accounts, closing and opening accounts as necessary, overseeing investments, and ensuring they align with the trust’s goals. They will need to track expenses diligently and gains from the trust to keep them at hand to file taxes each year for the trust and more.

This serious role isn’t for everyone and can be complex for those not well-versed. It’s important to note that when choosing an individual rather than a professional entity, the party is aware of the extensive requirements of their role and the importance of their duties to the overall benefit of the trust.

What Happens When The Trust’s Purpose Has Been Fulfilled?

The trust administrator will be required to carry out their duties for the life of the trust. Once the trust has fulfilled its purpose, the termination of the trust can begin. The administrator must once again determine the total current value of the trust using assessments and documentation to determine what can be distributed.

The administrator must ensure that all debts or creditor issues have been handled effectively, that all taxes have been paid with the proceeds left after any creditors have been paid, and that the remaining assets be distributed to the beneficiaries as stipulated.

A trust administrator may take other steps to dissolve assets as stipulated, close accounts, and more during this phase.

How Can a Trust Administration Lawyer Help Me?

Creating a trust is invaluable to a comprehensive estate plan. Choosing a trust administrator is vital to ensure that the trust you created can be carried out successfully and within your wishes.

Trust administration lawyers can assist in reviewing a trust that you have in place, creating a trust, preparing legal documents to ensure seamless funding of a trust, and more.

If conflicts arise that require litigation, they can ensure that your trust’s best interests are always a priority and help all relevant pirates come to an agreement.

Furthermore, they can identify issues that may arise through their legal expertise and how to avoid them, such as a conflict of interest or potential issues with beneficiaries.

With decades of experience helping our clients with their estate planning needs, we are well-versed and ready to assist you and your loved ones. Both competent and compassionate, we respect the need to have an effective estate plan in place, and we can walk you through each step of the process.

Call our office at 248-997-4394 to set up your case evaluation and learn more about how we can best assist you.

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