Trust Administration

When a settlor establishes an irrevocable trust or the settlor of a living trust dies, the trust's administration process begins. Trust administration involves working with the trustee (or sometimes one or more beneficiaries) to ensure compliance with the requirements of the trust document and applicable laws. The administration process culminates with the final distribution of assets, something which can take months or years, depending on the provisions of the trust.

During the period of administration, the trustee must complete many tasks, including the following:

  • Give notice to beneficiaries and heirs as required by law;
  • Inventory and marshal trust assets;
  • Pay outstanding debts of the decedent and give notice to creditors;
  • File annual federal and state income tax returns for the trust;
  • Determine and adjust the income tax basis of assets;
  • Prepare and file a federal estate tax return (plus any applicable state returns) and pay estate tax as needed;
  • Account for all assets, receipts and disbursements to the trust beneficiaries;
  • Sell or lease assets as needed;
  • Invest assets in a prudent manner, by establishing and reviewing regularly an appropriate investment policy that considers the terms of the trust and the interests of all beneficiaries;
  • Continue to operate businesses and vote outstanding stock owned by the trust;
  • Allocate assets between sub-trusts as required by the terms of the trust; in this regard we have worked with many clients to trace assets, income and distributions in order to carry out allocations that should have been done at the death of the first spouse;
  • Observe the fiduciary duties imposed on trustees; and
  • Make preliminary and final distributions.

We have represented numerous trustees in both simple and complex trust administrations. We have also represented beneficiaries in reviewing the actions of the trustee to ensure fairness and correctness. We can put our experience and skill in this area to work for you.

Probate

When an individual dies intestate (without a Will) or leaving a Will, a court-supervised proceeding may need to be instituted in the county court where the decedent lived, in order to transfer the decedent's assets to the heirs or beneficiaries. This court proceeding is commonly known as "probate," and can be both lengthy and expensive. In California, the fees for each of the personal representative (also known as an "administrator" or "executor") and attorney are set by statute and are calculated as follows:

  • 4% on the first $100,000
  • 3% on the next $100,000
  • 2% on the next $800,000
  • 1% on the next $9,000,000
  • 2% on the next $15,000,000
  • "Reasonable" compensation on the excess over $25,000,000

By way of example, the fees on a $500,000 estate based on the schedule shown above would be $26,000 ($13,000 to each of the personal representative and his or her attorney), plus filing fees and other costs.

Although a personal representative can tackle the proceeding without a lawyer, the complexity and detail required to get through the proceeding from beginning to end generally require the expert advice of an attorney. We have represented many personal representatives and beneficiaries of probate estates and are here to help. Contact us today!

Copyright © the Law Offices of Jacqueline Real-Salas. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement. Some artwork provided under license agreement.

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The Law Offices of Jacqueline Real-Salas is a full service Estate Planning & Tax Planning law firm. They provide comprehensive planning in the areas of wills, trusts, powers of attorney, medical directives, advanced estate planning, income tax planning, probate & trust administration, probate avoidance planning, special needs trusts, disability planning and asset protection. Jacqueline Real-Salas serves clients and their families all throughout the Los Angeles Area, including Temecula, Pasadena, Murrieta, French Valley, North San Diego County, and the surrounding areas, cities and towns.

Copyright © IMS. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement. Some artwork provided under license agreement.