The trust administration process is necessary when someone who created a trust passes away. The process is overseen by a trust administrator who has important duties throughout the process. Trust administrators, as well as beneficiaries under the trust, should strongly consider getting legal help to understand their rights and their obligations.
Unsworth LaPlante, PLLC provides assistance with the trust administration process throughout the state of Vermont. We know the legal rules for facilitating the transfer of assets after a trust creator has passed away and we will assist you in fulfilling your obligations. Give us a call today to learn more.
A Trust Administrator is in Charge of Trust Administration
When a trust is created, the creator, who is called a settlor, writes a trust document. Depending upon the type of trust created, the document may include the name of a trustee and/or a backup trustee. Sometimes, the settlor is the initial trustee and another person is selected as the backup trustee or successor trustee. In other cases, a third party is initially established as the trustee when the trust document is first created.
The third party who is named as the trustee (or as the backup trustee) is going to be in charge of taking care of assets in case of incapacity. Upon the death of the trust creator, this trustee will serve as the trust administrator. It is the job of the trust administrator to follow the instructions which the deceased included in the trust document regarding what should happen to assets upon death.
What is Involved in the Trust Administration Process?
The trust administrator has many important obligations after the creator of a trust has passed away. The administrator must first and foremost take care of the property which is held in the trust and make certain all property is managed appropriately until all of the property passes on to its new owners. The trust administrator has a fiduciary obligation to manage the trust assets, to protect the assets, and to make certain the assets can be used to benefit the beneficiary who was named in the trust document.
The trust administrator also has to oversee the legal requirements of the trust administration process after a death. Some of the different actions which must be taken during trust administration include:
- Providing mandatory notice of the death and of the trust administration process to all beneficiaries of the trust and to the heirs of the trust creator. Beneficiaries and heirs can file a trust contest if they do not believe the trust is a legally valid one which should be used to distribute assets.
- Identifying all property held by the trust, and transferring title of property appropriately according to Vermont law. When real property is transferred, exemption forms may need to be completed if the property transfers by any means exempt from property tax reassessment.
- Paying all taxes owed, and reporting income earned from assets in the trust to the IRS.
- Paying settlors debts and satisfying all liabilities, including paying both estate taxes and income taxes. The trustee needs to verify claims made against the trust.
- Keeping a detailed accounting of the trust, including all deposits, all distributions, and all uses of trust funds to wind up the affairs of the deceased settlor.
Unlike during the probate process, the court generally does not become involved in trust administrator. However, under Vermont Trust Law § 201 : “The probate division of the superior court may intervene in the administration of a trust to the extent its jurisdiction is invoked by an interested person or as provided by law.”
This means that beneficiaries of a trust or other interested parties can ask the probate division to intervene if they do not believe that the trust administrator is doing his or her job properly to protect trust assets and to facilitate the transfer of those assets. Trust administrators do not want to make mistakes during the trust administration process, and should ensure they seek proper legal assistance as soon as possible to comply with their obligations and hopefully avoid the need for court involvement.
Getting Help from a Trust Administration Lawyer
If you are serving as a trust administrator, you need to understand your obligations under the trust document and under Vermont law. Unsworth LaPlante, PLLC can help. Give us a call as soon as possible to discover more about who is in charge of the trust administration process and to get assistance throughout this process. You can attend a free seminar to find out what is involved in trust administration or you can get personalized advice by calling (802) 879-7133 or contacting us online.