Trust administration is a critical part of the estate planning process, ensuring that your assets are properly managed and distributed according to your wishes after you pass away or become incapacitated. While many people are familiar with the concept of creating a trust, the process of administering that trust can often seem overwhelming. This is where a trust administration attorney comes in.

At the Law Offices of Ann Marshall Robbeloth, we specialize in helping clients navigate the complexities of trust administration, guardianship, probate, and elder care. Whether you are looking to establish a revocable trust, an irrevocable trust, or need assistance with trust administration following a loved one’s passing, our experienced team is here to guide you every step of the way.

In this article, we’ll explore what trust administration involves, the common mistakes people make when setting up a trust, and why having an attorney by your side is essential for ensuring that your estate plan works as intended. We’ll also answer frequently asked questions about who should manage a trust, how much it costs, and why a trust administration attorney is often necessary to navigate complex legal matters.

What Does Trust Administration Do?

Trust administration refers to the process of managing and distributing assets in a trust according to the terms laid out by the trustor (the person who created the trust). Once the trustor passes away or becomes incapacitated, the trust administrator—often appointed by the trustor in advance—takes on the responsibility of ensuring the trust’s instructions are followed.

The role of the trust administrator can be complex, requiring a clear understanding of both the trust’s terms and the applicable legal requirements. Below are the key duties involved in trust administration:

• Notifying Beneficiaries: The trust administrator is required to notify all beneficiaries of the trust, explaining their rights and entitlements under the trust. This step is critical for keeping the process transparent and preventing misunderstandings.
  
• Inventorying and Valuing Assets: The trust administrator must identify and inventory all the assets held in the trust. This could include properties, investments, business interests, and personal belongings. A proper valuation is essential for accurately distributing the assets and addressing any potential tax liabilities.
  
• Paying Debts and Taxes: Before assets can be distributed, any debts owed by the trustor or taxes owed by the trust must be settled. The trust administrator is responsible for paying these from the trust’s funds, ensuring that all legal and financial obligations are met.
  
• Distributing Assets: Once the debts and taxes are settled, the trust administrator will distribute the remaining assets to the beneficiaries according to the trust’s instructions. This step must be carried out precisely to avoid legal disputes.
  
• Ongoing Management: In some cases, the trust administrator may be responsible for the ongoing management of certain assets, such as a family business or real estate holdings. This may involve managing investments or overseeing property maintenance until the assets can be distributed or sold.
  
• Filing Legal Documents: Throughout the administration process, the trust administrator is responsible for filing necessary legal documents, including tax returns, reports to the beneficiaries, and, if required, probate court filings.
  

While the trust administration process can be straightforward in some cases, it’s often complex and involves significant legal and financial obligations. This is why having a knowledgeable trust administration attorney to guide you through the process can help ensure that everything is done correctly and in line with the trustor’s wishes.

The right legal guidance can help minimize delays, resolve potential disputes, and provide peace of mind to both the trust administrator and the beneficiaries.

Do I Need a Lawyer to Administer a Trust?

While it’s possible to administer a trust without a lawyer, having an experienced trust administration attorney is highly recommended for several important reasons. The trust administration process can be legally and financially complex, especially when dealing with large estates or special circumstances such as guardianship or conservatorship issues.

Here are a few key reasons why working with a trust administration attorney can make a significant difference:

1. Legal Expertise and Compliance

A trust administration attorney has the expertise needed to ensure that the trust is administered in full compliance with both state and federal laws. Trusts are subject to numerous legal regulations that vary by jurisdiction, and failure to comply with these laws can result in costly mistakes, delays, or even legal challenges. A lawyer will ensure all legal obligations are met, including filing necessary documents, paying taxes, and resolving any disputes.

2. Avoiding Probate Complications

One of the primary reasons people establish trusts is to avoid probate, the court-supervised process of distributing assets. However, even when a trust is in place, certain assets may still end up in probate if they are not properly managed. A trust administration attorney can help prevent these complications by ensuring that all assets are correctly transferred into the trust and that the trustee follows the proper steps in the administration process.

3. Asset Valuation and Tax Filing

Part of trust administration involves accurately valuing assets and managing any associated tax filings. This includes filing income tax returns, estate tax returns, and property tax returns on behalf of the trust. A trust administration attorney can work with accountants and financial professionals to ensure that the correct valuation methods are used and that all taxes are paid in a timely manner, avoiding penalties or issues with the IRS.

4. Resolving Conflicts and Disputes

Unfortunately, disputes can arise among family members or beneficiaries, particularly if the trust is unclear or if there are perceived inequities in asset distribution. A trust administration attorney can help mediate these conflicts, interpret the terms of the trust, and ensure the wishes of the deceased are carried out as intended. With their legal background, an attorney can also represent you in court, should any disputes escalate to a formal legal challenge.

**5. Special Considerations for Guardianship or Conservatorship

If the trust involves provisions for minor children or individuals with special needs, issues related to guardianship or conservatorship may arise. A trust administration attorney can help manage these sensitive matters, ensuring that the appointed guardians or conservators are qualified and that their roles are legally defined.

**6. Ongoing Administration and Family Meetings

Some trusts require ongoing management of assets, such as real estate holdings, businesses, or investments. A trust administration attorney can ensure the trust is properly managed until assets are distributed. They can also assist with organizing family meetings to communicate with beneficiaries, keeping everyone informed about the administration process and preventing misunderstandings or conflicts.

When Is It Necessary to Hire a Trust Administration Attorney?

While some individuals may opt to manage a trust on their own, the complexity of the trust administration process often calls for professional guidance. If the estate involves large or complex assets, potential conflicts among beneficiaries, or special considerations like guardianship or elder care, it’s crucial to seek the advice and assistance of a trust administration attorney.

By working with a lawyer, you can ensure that the trust is administered properly, avoid costly mistakes, and help minimize the stress and burden on the family members involved.

At the Law Offices of Ann Marshall Robbeloth, we specialize in trust administration, probate, estate planning, and other related areas of law. If you’re unsure whether you need legal assistance, our team is here to guide you through the process and ensure that your trust is properly managed according to your wishes.

What Is the Biggest Mistake Parents Make When Setting Up a Trust Fund?

Creating a trust fund is an essential part of estate planning, providing a structured way to manage and distribute assets according to your wishes. However, there are common pitfalls that parents often encounter when setting up a trust. The biggest mistake parents make is failing to properly fund the trust.

The Importance of Funding the Trust

A trust is only effective if it is properly funded. When a trust is established, it is essential to transfer ownership of assets (such as real estate, bank accounts, investment accounts, and personal property) into the trust. If assets are not transferred, they may not be included in the trust’s distribution plan and may end up subject to probate, negating the purpose of setting up the trust in the first place.

For example, if you have an irrevocable trust or a revocable living trust, and you forget to place important assets like your home or investment accounts in the trust, those assets could be subject to probate and distributed according to your will, rather than the instructions you set out in the trust.

Other Common Mistakes

While failing to fund the trust properly is the most significant error, there are other common mistakes parents make when establishing a trust fund:

• Not Updating the Trust Regularly: Life events such as marriage, divorce, the birth of children, or significant changes in assets may require updates to the trust. Failing to update the trust to reflect these changes can lead to unintended consequences, such as excluding a new beneficiary or leaving out an asset.
  
• Choosing the Wrong Trustee: It’s essential to choose a trustee who is trustworthy, organized, and capable of managing the assets in the trust. Many parents mistakenly choose a family member who may not have the skills or time required to properly administer the trust. In some cases, a professional trust administrator or corporate trustee may be a better choice.
  
• Failing to Address Contingencies: Parents sometimes overlook important contingencies in their trust, such as how assets should be distributed if a beneficiary dies or if a beneficiary is unable to manage the assets. Without clear guidelines in the trust, disputes may arise among beneficiaries, leading to potential conflicts and costly legal challenges.
  
• Ignoring Tax Implications: Trusts can have complex tax implications. Parents often fail to consider the tax impact of their trust or neglect to include provisions that would help mitigate those taxes. A trust administration attorney can help identify tax-saving strategies, such as making charitable donations or allocating assets in ways that minimize estate taxes.
  
• Overlooking Guardianship and Conservatorship Issues: Parents of minor children often fail to establish clear provisions for guardianship or conservatorship in their trust, especially if they want to designate someone to care for their children if something happens to them. Failing to address these concerns can lead to uncertainty and confusion for the family, and can also delay the process of appointing a legal guardian.
  

How to Avoid These Mistakes

To avoid making these mistakes, it’s crucial to work closely with an experienced trust administration attorney who can guide you through the entire process. At the Law Offices of Ann Marshall Robbeloth, we specialize in estate planning and trust administration, and we can help you ensure that your trust is properly funded, up-to-date, and comprehensive.

Our team will review your assets, help you transfer them into the trust, and ensure that the trust accurately reflects your wishes and any special considerations, such as guardianship or elder care. We can also help you navigate potential tax issues, choose the right trustee, and address any contingencies that could arise in the future.

By taking the time to properly fund and manage your trust, you can avoid these common mistakes and ensure that your family’s future is protected.

Who Is the Best Person to Manage a Trust?

Selecting the right person to manage a trust is one of the most important decisions you’ll make during the estate planning process. The person you choose to serve as the trustee or trust administrator will be responsible for carrying out your wishes and ensuring that your assets are managed and distributed properly. It’s essential to carefully consider who is best suited to fulfill this significant role.

Here are some key factors to consider when selecting the best person to manage a trust:

1. Trustworthiness and Integrity

The most important quality a trustee must have is trustworthiness. The trustee will be responsible for managing the trust’s assets, paying debts, filing taxes, and distributing property according to the trustor’s instructions. This requires a high level of honesty and integrity. A trustee who lacks trustworthiness or is prone to making poor decisions can cause significant harm to the estate and to the beneficiaries.

• Family Members: Many people choose a close family member to be their trustee, such as a spouse, adult child, or sibling. This person will likely have the trustor’s best interests at heart, but it’s important to ensure that they can handle the responsibility.
  
• Professional Trustees: If you don’t feel comfortable choosing a family member or if you believe there might be conflicts of interest, a professional trustee or a corporate trustee, such as a bank or trust company, may be the right choice. Professional trustees bring legal and financial expertise to the role and can offer impartiality in situations where family dynamics may create tension.
  

2. Organizational and Financial Skills

The trustee must be organized and able to manage complex financial matters. This involves understanding the trust’s assets, managing investments, keeping accurate records, and handling any tax obligations. The trustee may also be required to make decisions about selling property, distributing assets, or managing ongoing business interests. For this reason, it’s important to choose someone who has strong financial skills or experience in asset management.

• Family Members: If a family member is a good candidate, they should have a solid understanding of financial matters or be willing to hire professional help when needed (e.g., accountants, financial advisors, or estate planners).
  
• Professional Trustees: A professional trustee, such as an attorney or financial institution, will already have the necessary expertise to handle these tasks without needing additional assistance.
  

3. Availability and Willingness

Trust administration can be time-consuming and may last for several years. The trustee must have the time and willingness to devote to this responsibility. They will need to make decisions, meet with beneficiaries, and manage ongoing tasks like filing taxes and distributing assets.

• Family Members: Before choosing a family member, ensure they have the time and willingness to carry out these duties. If they have a busy personal or professional life, they may not be able to dedicate enough time to properly managing the trust.
  
• Professional Trustees: A professional trustee is generally more likely to have the time and resources to devote to trust administration. However, they may charge fees for their services.
  

4. Ability to Handle Family Dynamics

Administering a trust often involves working with multiple family members and beneficiaries. The trustee may have to manage potential conflicts or disagreements among heirs. If your family members are prone to disputes, selecting someone with strong interpersonal skills who can remain neutral and handle conflict is essential.

• Family Members: A trusted family member may be a good choice if they can maintain impartiality and effectively communicate with all beneficiaries.
  
• Professional Trustees: If family dynamics are complicated or there is a history of conflict, a professional trustee or trust administrator can serve as an impartial third party, reducing the potential for disputes.
  

5. Legal and Tax Considerations

Some trusts, especially larger or more complex estates, require knowledge of tax laws and regulations. The trustee may need to file tax returns, manage tax obligations, or deal with the probate process. This is where a trust administration attorney can be invaluable.

• Family Members: If you select a family member to manage the trust, make sure they are comfortable with legal and tax requirements or are willing to work with an attorney to ensure everything is handled properly.
  
• Professional Trustees: Many professional trustees have the legal and financial expertise necessary to navigate these matters. An attorney can also assist with the trust administration process, making sure that all legal requirements are met.
  

6. Who Should Be the Trustee?

In general, the best person to manage a trust is someone who has the following qualities:

• Trustworthiness
  
• Financial knowledge
  
• Organizational skills
  
• Availability to manage the trust
  
• Ability to handle family dynamics
  
• The willingness to seek professional help when needed
  

If you’re unsure who to select, it’s always a good idea to consult with a trust administration attorney to discuss your options. At the Law Offices of Ann Marshall Robbeloth, we can help you choose the right person to manage your trust and ensure that your estate plan is executed smoothly and according to your wishes.

How Much Do Banks Charge to Manage a Trust?

When selecting someone to manage your trust, it’s important to understand the costs involved, especially if you’re considering using a bank or financial institution as your trustee. While family members or friends may serve as trustees without charge, professional trustees, such as those provided by banks, generally charge fees for their services. These fees can vary widely depending on the complexity of the trust, the assets involved, and the institution you choose.

Factors Affecting Bank Trustee Fees

Banks and financial institutions that offer trust administration services typically charge fees based on a percentage of the assets held in the trust or a flat annual fee. Several factors can influence the fees:

• Size and Complexity of the Trust: Larger and more complex trusts with multiple assets, investments, or real estate holdings will generally incur higher fees. A trust that requires ongoing management, such as a business or rental properties, will likely be more expensive to manage.
  
• Type of Assets: The nature of the assets within the trust can affect the cost. For example, if the trust holds stocks, bonds, real estate, or other complicated investments, the bank may charge higher fees due to the complexity of managing those assets.
  
• Services Provided: Some banks may charge additional fees for specific services, such as tax filing, legal consultations, or asset appraisal. In addition, fees may vary if the bank is required to manage the distribution of assets or deal with any disputes between beneficiaries.
  

Typical Fee Structures

Here’s an overview of the common fee structures banks use for trust management:

• Percentage of Trust Assets: Banks typically charge an annual fee based on the value of the assets under management. This percentage generally ranges from 0.5% to 1.5% of the assets each year. For example, if your trust contains $1,000,000, the annual fee could range from $5,000 to $15,000.
  
• Flat Fees: Some banks may offer flat fees for trust administration. These fees can vary widely but may be in the range of $2,000 to $5,000 per year, depending on the complexity of the trust and the services required.
  
• Additional Fees: On top of the annual management fees, banks may charge for specific actions, such as transferring assets, liquidating property, or dealing with legal matters related to the trust. These fees are typically billed separately from the standard management fee.
  

Are Bank Trustee Fees Worth the Cost?

While banks do charge for their trustee services, there are advantages to using a professional trustee, especially if you don’t have a trusted family member who is able or willing to take on the responsibility. Some of the benefits of using a bank or professional trustee include:

• Expertise: Banks have dedicated trust departments with experience in managing trusts and ensuring compliance with legal and tax requirements. They can handle complex financial issues, ensuring your trust is properly managed.
  
• Impartiality: Professional trustees are neutral and unbiased, which is especially important in families with complicated dynamics or potential conflicts. They can help prevent disputes among beneficiaries and ensure that the trust is administered according to your wishes.
  
• Continuity: Banks can provide long-term trust management services. Unlike individual trustees, banks have the resources to continue managing the trust if something happens to the original trustee or if the estate requires years of ongoing management.
  

Alternatives to Bank Trustees

If you find that the cost of using a bank trustee is too high or you prefer to have a more personal touch, there are alternatives to consider:

• Professional Trust Administrators: Independent trust administration attorneys or financial planners can offer trustee services, often at lower fees than banks. These professionals may be better suited to provide a more personalized service tailored to your needs.
  
• Family Members or Friends: If you have a trusted family member or friend who is capable of managing the trust and has the time and skills required, they may be an option. This would typically be at no cost, although it’s essential to ensure that they understand the responsibilities and are willing to take them on.
  
• Corporate Trustees: In some cases, using a corporate trustee (not necessarily a bank) may be a good option. These entities are professionals who can offer the same services as a bank without the higher cost. They also offer impartiality and expertise without any personal conflict of interest.
  

How to Make an Informed Decision

When deciding whether to use a bank, independent professional, or family member as your trustee, it’s important to consider both the costs and the level of expertise needed for your trust. The complexity of your estate, your family’s dynamics, and the specific services you require will all play a role in your decision.

A trust administration attorney can help you assess your needs and guide you through the process of selecting the best person or institution to manage your trust. At the Law Offices of Ann Marshall Robbeloth, we specialize in trust administration and can assist you in finding the right solution for your family’s estate plan. Whether you opt for a bank, a professional trustee, or a family member, we’ll ensure that your estate plan is executed according to your wishes and that all legal requirements are met.

If you have any questions about trust administration or need assistance with your estate planning, don’t hesitate to contact us today for a consultation.

​​Who Should Administer a Trust?

Choosing the right person or entity to administer a trust is one of the most crucial decisions in the estate planning process. The individual or institution you designate as the trustee will be responsible for managing your assets, paying debts, and ensuring that the trust is executed according to your wishes. There are several factors to consider when determining who should administer a trust, and the right choice depends on the specific needs of your estate and family dynamics.

Factors to Consider When Choosing a Trustee

The best person to administer a trust should possess several key qualities, including:

1. Trustworthiness: The most important characteristic of a trustee is trustworthiness. This individual or institution will have control over your assets and will be responsible for ensuring that your wishes are carried out. Therefore, it’s vital that the trustee is someone who can be trusted to handle these responsibilities ethically and responsibly.
   
2. Financial and Organizational Skills: Managing a trust requires a significant amount of financial and organizational expertise. A trustee needs to be able to manage investments, pay taxes, and keep accurate records. A person or entity with experience in financial matters, such as an accountant or attorney, may be better equipped for this role.
   
3. Impartiality and Ability to Handle Family Dynamics: If your trust involves multiple beneficiaries, conflicts could arise. The trustee must be impartial and able to navigate family dynamics effectively. Choosing someone who can remain neutral and avoid favoritism is crucial in preventing potential disputes.
   
4. Knowledge of Legal and Tax Obligations: Trust administration involves understanding legal and tax responsibilities. The trustee will need to file taxes for the trust, manage tax obligations, and comply with all relevant laws. This is where professional trust administration attorneys can be particularly helpful, as they have the expertise to ensure compliance and avoid legal issues.
   
5. Availability and Willingness: Administering a trust can be time-consuming and may require ongoing management for several years. It’s important to choose someone who is both willing and available to fulfill these duties. If your designated trustee has a busy personal or professional schedule, it could delay or complicate the administration process.
   

Options for Trust Administration

There are several options for who can administer a trust, each with its own pros and cons. Here are some of the most common choices:

1. Family Members or Friends: Many people choose a trusted family member or friend to serve as the trustee, particularly for a revocable trust. The main advantage of this choice is that the trustee may have a personal interest in carrying out your wishes and maintaining harmony among beneficiaries. However, family members or friends may not always have the financial expertise or impartiality needed to manage complex estates effectively.
   
2. Professional Trustees (Trust Administration Attorneys): If you are looking for someone with legal and financial expertise, a professional trustee such as an attorney or financial advisor might be the best option. A trust administration attorney can help navigate legal complexities, manage tax filings, and ensure that the terms of the trust are executed properly. Hiring a professional trustee also removes any potential conflict of interest that may arise in family dynamics.
   
3. Banks and Trust Companies: Some individuals choose to appoint banks or corporate trust companies to manage their trusts. These institutions are experienced in handling large and complex estates and often have dedicated trust departments. The primary benefit of using a bank is the reliability and professionalism of their services. However, trustee fees charged by banks can be high and may not be suitable for smaller estates.
   
4. Corporate Trustees: In addition to banks, other corporate trustees (e.g., investment firms or fiduciary services) can serve as impartial parties to manage your trust. Corporate trustees bring the same expertise and reliability as banks but may charge lower fees. They are also less likely to be emotionally influenced by family dynamics, making them an excellent option for estates that could involve disputes.
   

Who Should You Choose?

The choice of a trustee depends on your specific needs and the complexity of your estate. Here are some things to consider:

• Small, Simple Estates: If your estate is relatively simple and your family is harmonious, a family member or friend may be able to handle the role of trustee effectively. However, you should ensure that they have the necessary time and skills to manage the trust properly.
  
• Larger or More Complex Estates: For larger estates, or if your assets require sophisticated management (such as business interests, rental properties, or investments), a professional trustee or corporate trustee might be the better choice. These entities bring financial expertise and objectivity to the table, which can be especially helpful for more complex estates.
  
• Conflicts Among Beneficiaries: If your family members are prone to disagreements, appointing a neutral third party, such as a professional trustee or trust administration attorney, can help minimize conflict and ensure that the trust is managed fairly.
  
• Legal and Tax Compliance: If your estate is complicated from a tax or legal perspective, working with a trust administration attorney can ensure that the trust is properly administered, and all legal and tax obligations are met.
  

Consult with a Trust Administration Attorney

At the Law Offices of Ann Marshall Robbeloth, we specialize in trust administration and can assist you in choosing the best trustee for your needs. Whether you’re looking for a family member, a professional, or a corporate trustee, we can help you make an informed decision that aligns with your goals and wishes.

If you’re unsure who should manage your trust, don’t hesitate to reach out. Our experienced team can guide you through the process and ensure that your estate plan is executed seamlessly.

Ensuring the Right Trust Administration for Your Estate

Choosing the right individual or entity to administer your trust is an essential decision that can impact the future of your estate. Whether you opt for a trusted family member, a professional trustee, or a corporate entity, the most important thing is that your trust administrator is reliable, impartial, and equipped with the necessary financial and legal knowledge to handle the responsibilities effectively.

By taking the time to assess your needs and understanding the pros and cons of each option, you can ensure that your trust is managed in a way that aligns with your wishes and supports your beneficiaries. Whether you need assistance with trust administration, estate planning, or navigating the complexities of probate and guardianship, the right guidance is essential for peace of mind.

At the Law Offices of Ann Marshall Robbeloth, we specialize in all aspects of trust administration and estate planning. Our experienced team is here to help you choose the best path for your estate, ensuring that your assets are managed and distributed according to your wishes.

Get the Help You Need Today

If you’re ready to establish a trust or need assistance with trust administration, don’t hesitate to contact us. Our team is dedicated to helping you navigate this important process with confidence and clarity.

Contact us today for a consultation, and let’s start working together to create an estate plan that provides you and your loved ones with security and peace of mind.