You will undoubtedly have plenty of questions as a first-time Trustee, and believe us when we say you are not alone. After all, no two Trusts are created equal, and the intricacies of the roles bestowed upon Trustee A may be nowhere close to what Trustee B must take on to avoid common mistakes, manage unique family dynamics, and accurately carry out the intent of the Trust.

Simply put, being a Trustee is confusing. Since estate planning guidance is our specialty, our goal with this ongoing series of articles is to help Trustees understand their role, identify what needs to be done, and guide them through the nuances of the job.

Since we are on the topic of typical Trustee questions and concerns, here are a few we are often asked by your counterparts.

Click here to read the first installment of this series.

First Things First: What Is a Trust?

A Trust similar to a Will specifies who gets your stuff when you die. The distinction is does someone have to go to court if you become incompetent or pass away.  A fully funded trust avoids the need for court involvement. A Trust is a fiduciary relationship where property and assets are legally transferred to a trustee, who then manages the property for the Trust’s beneficiaries. Trusts enable the person creating the Trust to determine who receives what benefits from the Trust and when. Trusts are becoming more common now that people are beginning to realize they are not just for the super-wealthy. Remember, the term “estate” simply refers to everything you own – whether it is $1 or $50,000,000. 

Trusts also offer the ability to name successor trustees and cover disability and incapacitation. 

Trusts are either living trusts or testamentary trusts. Living Trusts are established during the trustor’s life. They can either be revocable (you can manage assets held in the Trust however you like during your lifetime, including canceling the trust) or irrevocable (cannot be modified or terminated). Testamentary Trusts take effect when the trustor dies, and their Will has been through probate.

What Is a Trustee’s Role?

Your role as a Trustee is to carry out the intent of the Trust. Essentially, you are the manager of the Trust. When the Trust is set up, usually the Trustor(s) (the one(s) who created the trust) act as initial Trustee(s). Once the initial Trustee becomes too ill, disabled, incapacitated, passes away, or for any other reason is unable or unwilling to act, then the “Successor Trustee” (that is you) named in the Trust document is to take over. Sometimes, there may be “Co-Trustees” named; in other words, more than one individual may be specified to act together. 

A Trustee’s duties can include, but are not limited to, the following:

• Managing Trust funds, including collecting funds owed to the Trust and protecting assets
• Conducting business transactions
• Disbursing checks and property 
• Making required or discretionary distributions to beneficiaries
• Paying outstanding debts and taxes owed by the Trust
• Keeping records, preparing tax returns, and providing reports as requested
• Other lawful transactions

Does Having a Trust Make Administration Easier?

In most cases, it will simplify things. The reason is that when everything is in a Trust, there will not need to be any court involvement. Conversely, there can be lots of complications when things go through probate. 

What Makes Trust Administration Complicated?

There are several factors, but perhaps the single biggest one is how complex the affairs of the person whose affairs are being administered were. Disputes make Trust administration much more difficult, and where there are significant disputes, those make administration more complicated than the person’s affairs. 

Fortunately, a relatively small percentage of estates involve significant disputes. Another fact is the amount of benefits provided to beneficiaries. More benefits usually mean more complexity, but this is something where the additional cost and complexity are worth it for the beneficiaries.

Would it Be Easier Not to Have Any Planning?

This is a huge myth! Planning provides a roadmap and a set of rules. With no roadmap and numerous sets of rules to apply, even relatively simple matters get complicated. Good planning will almost always streamline things and make them easier than they would have been without good planning.

Call Leigh Hilton PLLC Today!!

Having a competent attorney in your corner will help you and your family navigate the often overwhelming waters of protecting everything you own and everyone you love. That is our job, and we think we do it better than anyone else. Call Leigh Hilton PLLC so that we can help ensure you and your family are taken care of in the best way possible. 

Leigh Hilton PLLC wants to be your first call every time for any estate planning need. We look forward to serving you.