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Administration Tips from A Trust & Estate Attorney

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Once an estate plan has been finalized by a qualified trust and estate attorney, it needs to remain current to reflect an individual’s or family’s situation. Upon death, the trust then begins the trust administration phase. It’s a complex job of the trustee — the person in charge of carrying out the terms of the trust — and  can hold many challenges depending upon the nature of the trust. A trust’s purpose can vary from providing for family members, managing real estate, or even caring for the family dog (called a pet trust). Trust terms are specific, and must be carried out in a particular and specialized way. Administering a trust can be a very daunting job. Unfortunately, there is no guidebook or set of rules for trustees to follow.

Over the years of probate and trust administration, we’ve found these tips make everyone’s job easier:

Read & Understand the Trust

The trustee is obligated to administer the trustee according to its terms. So trustees should carefully read and examine the wording of the trust to determine his/her duties. If you don’t understand the trust, consult the trust and estate attorney who drafted the estate plan. Or, if they are unavailable, seek one out. By thoroughly understanding the trust, you’ll be better able to administer it’s terms and conditions.

Accurate Accounting

Not only is it imperative, it’s required. Disputes between trust beneficiaries often arise over how much a trustee is being paid. Some trusts explicitly provide for the amount of compensation to trustees, while others are silent and allow room for interpretation by providing that the trustee is allotted “reasonable compensation” for services rendered. Trustees are required to provide beneficiaries with an annual accounting that explains the trust income and expenses.

Keep Track of Inventory

Even though all the necessary estate planning documents have been signed, it does not mean that assets have been properly transferred into the trust and vested in the name of the trustee. Trustees need to locate all potential trust assets to ensure they have been properly transferred to trust.

Remain Neutral

Probably our best advice, but the hardest to put into practice, is remaining neutral. Even trustees with the best intentions are subject to scrutiny by beneficiaries that feel they’ve been treated unfairly.  Trustees should seek advice of a trust and estate attorney if there is a question on how to proceed in a complicated matter.

Get Insurance

Aside from seeking the assistance of qualified legal counsel, trustees should also acquire property (fire) insurance to cover liability for personal injury on real property. If you’re dealing with a large estate and warring siblings, we highly recommend acquiring malpractice or liability insurance, which would cover personal liability as the trustee.

Still not sure where to start? Give us a call and we’ll be happy to discuss your trust administration situation.


About Dan Hanley

Specializing in estate planning, elder law and real estate law, Dan brings a wealth of experience and knowledge to help his clients with a variety of legal needs. In addition to a MBA and Juris Doctorate from Santa Clara University, Dan is also a licensed real estate broker since 1980.

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