Trust Administration

Trust Administration (or sometimes referred to as Trust Settlement) is different from the probate process. A trust is a legal contract between the maker (or grantor) of the trust and the beneficiaries. Trustees have the responsibility to make sure the trust is implemented correctly. The process of implementing the trust – making payments to beneficiaries and filing necessary accountings and tax returns – is what is known as Trust Administration or Trust Settlement. This process usually ensures that the beneficiaries will receive the assets as outlined in the trust. Sometimes this means a one-time, lump sum payment; sometimes payment is over time. Sometimes payment may be of the income only. It all depends on what the trust document says. Trustees or family members should be sure to consult with an attorney to understand their obligations.

When someone passes away with assets in their name alone, many times a Pour Over Will can serve to place (or literally ‘pour over’) those assets in trust (sometimes referred to as a ‘Stand-by Trust’). This ‘pouring-over’ happens by the probate process. After the assets are put into the trust this way, they are then used for the beneficiaries as directed in the trust. The trustee is often directed to divide the trust into separate shares for tax purposes.  Again, an attorney should be consulted to ensure that tax and other laws are complied with during this process.

Trust documents should be reviewed by an attorney. A trustee has liability if assets are not distributed correctly. If named as a Trustee, you will want to make sure you review and fully understand your liability. Some trusts are settled and closed quickly while others will be ongoing (it all depends on the terms of the trust document. Typically, the trust will need to file a tax return annually if it is earning money.

Our fees to assist with trust settlement are usually calculated on an hourly basis unless you have done your estate planning with our firm. When you have done your estate planning with our firm and kept your plan updated (and your trust fully funded during lifetime) we offer a fee cap for settlement services. We try to have as much of the work as we can done at the paralegal level to avoid the higher rates of the lawyer. Of course, all of the work performed by a paralegal is supervised and reviewed regularly.

For more information about a new Trust Settlement or an ongoing Trust Administration, please contact us at (617) 716-0300 or info@squillace-law.com.