wills and trusts

Trust and Estate Administration: What You Need to Know

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Wills and trusts are often viewed as a thing of movies. An insanely rich person dies, leaving behind a vast fortune… And so, begins the classic cinematic tableau. 

Estate planning, however, is not only reserved for the wealthy. To protect their assets and loved ones, many people are now actively taking part in planning what becomes and who gets a hold of whatever worldly possessions they’ve accumulated by the time they pass on. For example, after the death of a family member, it is vital to plan for an estate sale if there is no desire to own the deceased member’s property.

Creating a will and setting up trusts with the help of skilled trust and estate attorneys are the best ways to protect assets and make sure that they end up in the right hands. Of course, someone has to administer these assets if the grantor becomes incapacitated or is no longer around.

If you’ve been tasked to administer a trust, an estate, or both, here are important things you need to know about trust and estate administration:

Wills and Trusts

Wills and trusts are two critical pieces of an estate plan, although a person can have one and not the other. When a trust is created, all the assets placed into the trust are removed from the estate. These assets are then managed and distributed by the trust through the trustee. 

A will, on the other hand, dictates how probate assets, including superannuation and real property, are to be distributed after the owner’s death. The executor oversees the distribution of these assets to the beneficiaries.

The Role of The Executor

The executor handles the decedent’s affairs after death and administers the estate according to the contents of the will, with the exception of trusts. Part of an executor’s duty is to pay any debts or taxes that might be due after the decedent’s passing, and then distribute the remaining properties to the rightful beneficiaries.

Executors are usually named in the will, but may also be appointed by the courts. The executor can be any legally competent adult of the decedent’s choosing or approved by the probate court.

The Role of The Trustee

When a grantor creates a trust, he/she names a trustee who is tasked to oversee the management of the trust during and after his/her lifetime. At the grantor’s passing, the trustee has to administer or distribute the trust assets to the beneficiaries as directed in the trust document. The trustee may be given the right to control and invest certain assets on the beneficiary’s behalf.

As with executors, a trustee, too, must be a legally competent adult. Some states require trustees to take an oath and post a bond to manage a trust.

A Person Can Serve as Both Trustee and Executor 

It’s not uncommon for people to appoint the same person as trustee and executor when planning their estate. In fact, having one person take on both roles can streamline the estate and trust administration process, as it eliminates the need for communication and potential conflicts between the trustee and executor. Furthermore, it will help minimize expenses 

Still, many people prefer to name a different executor and trustee. As no one person has unilateral control over everything, there’s a higher chance for checks and balances in the administration of the trust and estate. The problem with having multiple people involved, though, is the possibility of misunderstandings, which can delay the settlement process.

The Trustee Has A Fiduciary Duty

Trustees are granted control over the assets in the trust, but this control comes with an enormous responsibility. As a trustee, you are not only responsible for distributing the funds as dictated by the terms of the trust. You also have to exercise the highest duty of care when handling and administering these assets.

The role of the trustee comes with the fiduciary duty to act in the best interests of the beneficiaries. Being a trustee means faithfully carrying out the terms of the trust; taking reasonable measures when making investment decisions so as to invest where appropriate, and putting the heirs’ interests before your own to ensure that the assets are maintained and managed for the benefit of the successors.

Trustees act personally. Thus, contrary to popular belief, they can be held personally liable for any debts or losses incurred while serving as trustee.

The Trustee or Executor Can Decline Appointment

To be named as trustee or executor implies that someone has enormous trust in you and in your capability to manage their properties for their beneficiaries. But while it is, indeed, an honor to be asked or appointed, you don’t have to accept if you think you might not be able to handle it. 

It’s not easy being a trustee or executor. The post entails a lot of responsibilities, and complicated family dynamics can make the job especially stressful, to say the least.

That said, you have the choice to say no to a direct request by the grantor or decline in case of appointment by will. You can file an appeal in court to excuse yourself from executor duties, and the court can name another executor in your place.

You Don’t Have to Do It All on Your Own

Trust and estate administration is no easy feat, and it can be particularly overwhelming to those with zero or minimal experience. The good news is that you don’t have to go through it alone. Trustees are entitled to recruit other professionals to help them better manage the trust – at the trust’s expense, of course.

You may hire an appraiser, a broker, and an accountant to assist you in handling financial issues. Most importantly, having an experienced trust and estate attorney onboard will provide you with the critical guidance to better navigate the complexities of the law and is, therefore, invaluable to trust administration.

The roles of trustee and executor are usually given to family members or closest friends, which is why they’re often so hard to fill following the death of a loved one. Still, the task of administering the trust and the will set up by the deceased has to be carried out promptly. Enlisting the help of a reliable estate planning attorney can make the process as painless as possible.

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Lauren Summers
Lauren Summers
Lauren Summers is the Content Marketing Strategist for Miller, Miller & Canby, one of the most respected law firms in Montgomery County, and the Washington, DC metropolitan area. The firm focuses on five core areas of practice: Land Development, Real Estate, Litigation, Business and Tax, and Trusts and Estates Law. In her spare time, she reads books and plays board games with her husband and two kids.

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