Trust & Estate Administration
A trust is an agreement between the trust’s creator (referred to as a Settlor or Trustor generally) and the fiduciary that manages the trust assets for the named beneficiaries (referred to as a Trustee).
Trusts are an amazing planning tool and can be designed and implemented for a seemingly infinite variety of purposes. Trusts are utilized for probate protection, tax planning, creditor or asset protection planning, protection of assets in case of a beneficiary’s future failed marriage, managing assets for minors, managing co-owned assets, etc.
We provide counsel and assist Trustees with respect to the trusts that they manage. Sometimes the Settlor of the trust names themselves, friends, or family to serve as Trustee. While other times they name corporate Trustees (i.e., banks and trust companies) or private fiduciaries (i.e., people who are licensed as professional Trustees). We have worked with all kinds of Trustees and enjoy highlighting their specific skillset while advising them of their duties and options in administering a trust.
Administration (Unrelated to a Recent Death)
We advise Trustees and other trust advisors on day-to-day administration of trusts, specific transactions, and tax issues.
We have particular expertise in advising Trustees on California income taxation issues for non-California trusts. Depending on the trust’s distribution terms, residences of beneficiaries and trust fiduciaries, and characteristics of the trust income, non-California trusts may still be partially, or fully, subject to California income taxation. We assist Trustees in determining how to address these issues and also advise clients on how to design trusts to avoid inadvertent California income taxation for a non-California trust.
We provide guidance to successor Trustees who believe it may be time for them to step into the Trustee role and wish to understand what is involved and ensure that the transition from the existing Trustee to themselves is as smooth as possible. This can be especially tricky when the existing Trustee is an elderly or ill family member or close friend. Given our years of experience in these types of situations, we pride ourselves on being able to handle each situation with grace and compassion while keeping in mind, most trusts contain valuable complex assets that need attention.
Post-Death Administration
Dealing with death is never easy. Even if there is no court proceeding required to “probate” the decedent’s Will, there is always some amount of trust or estate administration work required for legal and tax purposes when a person passes away.
We can guide you through the complex legal issues that often arise during administration of an estate or trust. Even when an estate plan is in perfect order, a number of important tasks will need attention after a person’s death. And in some cases, critical tax planning opportunities may be available if identified early in the administration.
In a post-death administration situation, we usually represent the Trustee of the decedent’s revocable trust for the bulk of the administration work. This is because the revocable trust is generally the primary governing instrument explaining the decedent’s wishes for the management and disposition of their assets. If there is no need to open a formal probate proceeding in court, the Trustee of the revocable trust, who is often the same person that is named as the preferred executor under the decedent’s Will, may need to administer assets held in the decedent’s name (outside the trust) too. For instance, we may need to assist them with making claims on behalf of beneficiaries of joint assets, life insurance policies, and retirement assets, or preparing and filing affidavits to marshal small assets in the decedent’s individual name into their revocable trust after death.
We often prepare estate tax returns when they are required and work together with the family’s accountant or CPA to coordinate post-death income tax issues and filings that are required. We work with Trustees to prepare asset allocation plans for the division of trusts and then assist them in establishing subtrusts and dividing the trust estate among the subtrusts or other beneficiaries. Depending on the situation, we may recommend the preparation of an informal or formal accounting ahead of distribution or holding back a reserve for a period of time to allow the Trustee to respond to additional issues that may arise after the main distribution occurs.
