Trust Administration
Professional Trust Administration Services
What if you are dealing with the death of a friend or family member who had a “trust,” and you are the person named to take over as “trustee” (read: manager)? Then you are facing a big, and potentially complex, project ahead. You will need an expert in trust law, to answer your questions, and guide you, help you make various judgment call decisions, as you go about the many tasks ahead.
Understanding Your Duties as a Successor Trustee
Do you know the tax filings that are required? The deadlines involved?
Do you know what assets must – or should – be professionally appraised, and why? Or which ones should – or shouldn’t – be sold and liquidated, and how to do it right?
Do you know about your legal duty to share information with all beneficiaries, including what to share, and when? Or about your duties to conduct good recordkeeping, and to produce periodic “accountings” for the beneficiaries, and when you must turn those over?
If you are the “Successor Trustee,” then there are a great many tasks or “action steps” that must be accomplished. And many (but not all) have deadlines attached. Some deadlines in Kansas Trust law are as quick as 60 days after the death of the person who created the trust.
A Successor Trustee
A successor trustee is legally obligated to behave and to perform the job to a very high standard, called “fiduciary duties.” But what do “fiduciary duties” entail?
A trustee has fiduciary duties (to the beneficiaries) such as competence, being fully informed, diligence, proactivity, timeliness, honesty, transparency, and never doing anything contrary to the beneficiaries’ interests (especially anything that is in the trustee's interests). Plus, you cannot treat any beneficiary preferentially, or better, than another.
Fiduciary Duty
A Successor Trustee who violates any of these principles can be sued for “breach of fiduciary duty” and either (a) removed from the role of “Trustee,” or even (b) held personally, financially liable to the beneficiaries.
And yet, assuming she doesn’t violate her duties, a Trustee can be paid for doing this complex and important job. Most trust documents expressly allow “reasonable compensation” for the Trustee who takes over, after the creator of the trust has died. But it must be fair, reasonable, and well-documented. (Pro Tip: it is usually best to keep detailed records of your “hours” spent on the project, and bill by the hour, like your lawyer does.) And because the job is delicate and important, I encourage Trustees that they SHOULD accept compensation. You will still be doing your family a huge favor by taking on this multi-step, complex process.
The Need for Expert Legal Counsel
But don’t try to do it alone. No one but an experienced, professional trustee should try to go through that process without expert legal counsel. Remember that all legal fees (and trustee's fees) get paid from the assets in the trust left by the deceased family member. Even a few hours of meeting with me, talking through the issues, and getting a customized, clear “action plan” laid out could save you a ton of wasted time, energy, effort, and money and prevent you from “missing things” or making terrible mistakes.
Getting legal counsel for your new task as Trustee is [usually] not as expensive as the legal fees involved in going through a Probate Estate. And it’s a very smart investment, for not only the Trustee, but for all beneficiaries and other interested parties.
The Complexity of Settling an Estate
The process of “settling an estate” in a Trust scenario is very similar, in many ways, to the process of “settling an estate” in probate court. But there are many important differences. The variety of issues, and scenarios, that a “Trustee” could encounter, in the Trust scenario, is far bigger - - - more issues, more judgment calls, and frankly, more ways to go wrong and wind up being second guessed. I will refrain from listing them all on this website page, because there are too many, and many of them only come up rarely.
The lesson is: don’t just wade into this project without expert guidance – it’s too dangerous. Instead, call me. We’ll customize and tailor the advice you need to fit your trust document, set of assets, and family members.
Should You Considering Just Turning It All Over to a Professional?
Know that after we talk in depth, if you decide that you just don’t want to do this job, then you still have options. You can make an informed decision to “decline” the role and duties, and allow someone else to do it. (If you are also a “beneficiary,” then your inheritance rights will not be impacted, at all, by declining to serve as Trustee.) You may even be able to direct and control who would take over, in your place. Perhaps even a Professional, Corporate Trustee. There are many good ones in the Kansas City Metro Area. I know top Trust Officers at every one of them. I work with them often. I can help you find the right one, or help interface with them on sensitive or delicate issues, if you should choose to turn it over to a professional Trustee.
But don’t decide to “decline” the role until you have fully explored the duties, tasks, and action steps involved. Come talk it through. You may find that, with expert guidance, it is all very manageable, and not intimidating, after all. You may also find that you would get great personal satisfaction from serving your deceased parent or relative, and serving their living family members, in this vitally important “trust estate settlement” project.