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Skilled Legal Assistance in a Challenging Time
Losing a loved one can be a challenging experience for many reasons. You may go through some difficult emotions as you mourn their loss. It can also be challenging for families to move on and come to agreements regarding settling the estate assets that the deceased person left behind.
The trust administration process can help protect the decedent’s assets from creditors and predators and minimize the estate taxes due. However, administering a trust is a complex process that must be carried out appropriately for the trust’s assets to be distributed according to the deceased person’s wishes.
If your family member passed away and left behind trust accounts, you should contact a reliable estate administration attorney immediately. Your lawyer can help you navigate the trust administration process and ensure that the trustee carries out his or her responsibilities efficiently, including distributing the trust assets. If necessary, your lawyer can also help guide you through probate court to minimize the adverse effects this costly process can cause.
Call the Davidov Law Group immediately for more information on trust administration and guidance specific to your needs. Call (516) 253-1366 to speak with our talented legal team and schedule a consultation today!
What is a Trust?
Trusts can be used to store assets for various purposes. There are many kinds of trusts, each with different purposes and regulations, and not all of them offer protection from creditors or predators. Some trusts offer more flexibility but less protection. Other trusts, like certain irrevocable trusts, give the creator or grantor excellent protection but less ability to access the trust assets.
Trusts can hold many various types of assets, including stocks, bonds, checking account funds, real property, vehicles, and other valuables. Trust funds are controlled by a trustee or person designated to have access to the trust. When the grantor dies, the trustee is also responsible for distributing trust assets to the beneficiaries named in the trust. This can include family members such as parents, a spouse, minor children, grandchildren, and adult children. Other possible beneficiaries include friends, charities, and even pets.
Trusts are a valuable part of an estate plan, giving grantors more control over how their estate assets are distributed, privacy during the estate administration process, potentially and even protection from the estate tax. Contact our law firm right away if you need help creating or administering a trust for yourself or a loved one.
What Are Some Common Types of Trusts?
One of the great advantages of having a trust is the flexibility that this gives the grantor in how the assets are distributed to beneficiaries. Family members can also benefit from a trust following the death of a loved one because they will know precisely how to handle the estate administration. This removes a great deal of strain that could harm family relationships while sorting out the inheritance left by the decedent.
When administering a trust, it is essential to understand what kind of trust it is so the purposes of the trust can be carried out. The following are some common forms of trusts in the Long Island area:
Living Trust
A living trust is unique in that the grantor may name him or herself as trustee during his or her lifetime. This means the individual who created the trust retains control over the trust funds until he or she passes away. A living trust should include a successor trustee who will administer the trust following the grantor’s death.
These trusts are a powerful way to protect assets from probate, saving family members from the costly and expensive probate court process. A living trust can be either revocable or irrevocable, depending on the level of asset control and protection desired.
Revocable Trust
A revocable trust is any trust that may be changed by the grantor. A living trust is one example of a revocable trust. In these accounts, the grantor retains control over the trust funds until his or her death. At that time, the assets may be transferred to the beneficiaries named in the trust.
Irrevocable Trust
Irrevocable trusts cannot be changed, and assets held within these accounts cannot be removed. These trusts offer a great deal of protection for the grantor and beneficiaries. However, you should consult with a legal professional before creating an irrevocable trust to be sure it is the right choice for you, as these trusts are not easily amended if you change your mind later. However, you may have the option to remove and appoint new trustees if needed.
Charitable Remainder Trust
A Charitable Remainder Trust involves the grantor setting up the trust and putting an asset into it. The grantor’s preferred charitable organization benefits from the remainder of the assets in the trust. The beneficiaries get a stream of income for the time specified in the trust. The remaining value of the trust goes to the charitable organization, which offers tax advantages and a high degree of flexibility when it comes to distributing assets. The grantor typically receives an immediate income tax deduction.
Animal Companion Trust
Another type of trust that is less well-known is the animal companion trust. In these accounts, a beloved pet may be the recipient of trust funds following the trust creator’s death.
What Are the Steps in Trust Administration?
If your loved one left behind a trust when he or she passed away, you may wonder how to handle the trust administration process while simultaneously mourning the loss of your family member. At this time, it is critical to contact a legal representative who can help you distribute trust funds and watch out for your family’s best interests.
The following are some important steps during the trust administration process:
Taking Inventory of Assets
When beginning the trust administration process, the trustee should first assess what valuables are held within the trust and determine the worth of the account. Your attorney can help ensure everything is appropriately valued, as this can affect taxes owed and what creditors are paid, if necessary.
Filing the Estate Tax
Another critical step in estate administration is determining the amount of estate tax due to the IRS. If the estate’s value exceeds the applicable federal estate tax exemption, an estate tax return must be filed. This includes determining whether the estate is valued over New York’s limit for federal estate taxes. Filing with the IRS is also essential to avoid any problems arising from not paying the estate tax due.
Settling Claims with Creditors
One of the most important steps in estate administration is to satisfy creditors who have a claim on the decedent’s wealth. This includes the IRS, home mortgage companies, banks, and credit card companies.
Dividing Trust Assets
Next, the trustee should distribute the trust fund’s assets to the assigned beneficiaries as designated by the trustor. The individual assigned this task must understand he or she is to follow the instructions in the trust, not personal preferences, during this process.
Distributing Assets to Beneficiaries
When it is time to assign the remaining assets to beneficiaries, each individual receiving from the trust must be notified immediately. To help follow New York guidelines on this process, please speak with a trusted estate attorney.
What is the Trustee’s Responsibility?
In the State of New York, the trustee is recognized as a person with a fiduciary duty to administer the trust as specified by the trustor. In this case, a fiduciary duty means a high level of care and faithfulness is owed to the trustor’s wishes. The trustee agrees not to administer the trust funds in any way other than the grantor instructed, whether the trustor is living or deceased.
Some of the duties held by the trustee are to assess the value of the trust, file with the proper authorities regarding taxes or probate, and distribute the assets to beneficiaries according to the grantor’s wishes. The trustee must also ensure beneficiaries qualify for the trust funds, such as being of proper age and fulfilling the grantor’s instructions before receiving trust assets.
If you have been named as trustee for someone’s trust, please get in touch with an experienced trust administration attorney right away for help in fulfilling your duties. Your responsibilities as trustee can be overwhelming, but they must be completed in accordance with the law. Having a professional on your side can give you the peace of mind that the trust will be distributed properly so you can proceed confidently.
How Can Trust Administration Lawyers Help Me?
Moving forward in trust administration without an attorney can have devastating consequences. If the necessary tasks are not completed according to New York law, assets may not be distributed properly, leading to the costly and time-consuming probate process. A lawyer can also help ensure that all deadlines are met, including payment of taxes.
Some other duties fulfilled by an estate lawyer when administering a trust are:
- Gathering, protecting, and managing assets
- Notifying beneficiaries and heirs
- Filing taxes
- Identifying and inventorying assets
- Handling the federal estate tax return if necessary
- Distributing trust funds in accordance with the grantor’s wishes
- Implementing business succession plans
- Locating creditors and paying all remaining debts
- Resolving conflicts among beneficiaries
- Keeping detailed trust records
Should You Hire Our Trust Administration Attorneys?
The trust administration process can be tedious and overwhelming, especially when you are grieving for a lost family member or friend. At Davidov Law Group, we promise to listen carefully to your concerns and give you dependable legal counsel and representation as you navigate the complex and confusing trust administration process.
We have helped countless trustees and beneficiaries get the results they deserve in settling the estates of their loved ones. We aim to make this process as simple and painless as possible while ensuring all matters are tended to in accordance with New York law, so your family doesn’t face any legal issues in the future. We will leverage our experience, knowledge, and compassion to achieve your family’s goals during the estate administration of your loved one.
Don’t go through this difficult process alone. Contact Davidov Law Group today for knowledgeable, understanding lawyers who will work tirelessly to help with your trust administration needs. Call (516) 253-1366 today to schedule a meeting with our talented legal team.
FAQs About Trust Administration in New York
If you are a trustee or a beneficiary in Long Island, you may have questions about the trust administration process. Here we provide answers to some frequently asked questions.
What Exactly Is Trust Administration?
Trust administration is the process by which a trustee manages and distributes the assets of a trust after the grantor (person who created the trust) passes away or becomes incapacitated. This process involves managing the trust’s assets, paying debts, and distributing property according to the terms of the trust.
Who Can Be a Trustee?
The trustee is the person or entity designated by the grantor as responsible for managing the trust. That person or entity is entrusted with fiduciary duties to act in the best interests of the beneficiaries of the trust. Family members, friends, professional advisors, and financial institutions may be named as trustees. In New York, a trustee must follow the terms outlined in the trust document, as well as all applicable state laws.
How Long Does Trust Administration Take?
The time frame for settling a trust after the creator of the trust dies can take anywhere from several months to several years. The following factors can affect the amount of time trust administration takes:
- Type of trust: If your loved one had a living trust, all assets will be transferred immediately to a successor trustee upon his or her death. A testamentary trust (one created through a will), on the other hand, must go through probate before the assets can be distributed. Probate can take several months to several years.
- Complexity of the trust: A simple trust, with easily identifiable assets and clear instructions typically takes less time to administer. Complex trusts with numerous assets, specialized provisions, and multiple beneficiaries often take longer.
- Types of assets: Certain types of assets held in a trust can significantly extend the administration timeline. For example, it may take longer to assess, maintain, and transfer real estate holdings. If trust assets include ownership interests in a business, the trustee may need to manage the business, file taxes, or liquidate the business. For certain types of investments, such as stocks, bonds, and other financial instruments, the trustee may need to work with brokers or financial advisors, which can add time to the process.
- Debts and taxes: If the trust has debts, the trustee must ensure all obligations are paid before distributing assets. Any pending lawsuits or claims against the trust must be addressed first. In addition, trustees are responsible for filing income tax returns and, in some cases, estate tax returns for the trust. This can prolong the process.
- Disputes among beneficiaries: Disagreements about the interpretation of trust provisions and disputes among beneficiaries can significantly delay the administration process. The need for mediation or litigation can extend the time it takes to finalize distribution of the assets. Challenges to the validity of the trust or its terms may include allegations of undue influence or lack of capacity. If legal proceedings are required, it can drag out the trust administration timeline.
- Trustee’s experience and efficiency: A family member or a friend serving as trustee may be unfamiliar with the trust administration process, may have other responsibilities, and may take longer to administer a trust. The process can be tedious and overwhelming, particularly when you are grieving the loss of a loved one.
Our experienced Long Island trust administration lawyers at Davidov Law Group have helped countless trustees and beneficiaries. We strive to make the process as simple as possible, ensuring all matters are handled according to New York law. Do not go through the process alone. Contact us at (516) 253-1366 to schedule a meeting with our team.
