Although probate can be avoided by having a revocable living trust (RLT), there are still many legal and financial matters that need to be addressed when the person who created the trust dies or becomes unable to manage his or her own affairs anymore, which is sometimes referred to as becoming incapacitated.
When someone with a trust dies or becomes incapacitated, the person who is named in the trust as the successor trustee takes over the responsibility of managing the trust, according to the instructions contained in the trust.
The successor trustee owes various legal duties to the beneficiaries of the trust. For this reason, the trustee is sometimes referred to as a fiduciary.
Common fiduciary responsibilities include:
- making certain tax elections before deadlines expire;
- filing the deceased person’s final income tax returns;
- filing gift and estate tax returns;
- obtaining a tax identification number for the trust and filing tax returns for the trust;
- locating and sending proper notices to trust beneficiaries;
- notifying creditors and paying the deceased person’s bills;
- identifying, collecting, and valuing trust assets;
- distributing trust assets to beneficiaries according to the terms of the trust;
- preparing and sending trust accountings at least annually;
- managing, selling, and/or investing trust assets;
- creating and allocating assets to subtrusts if directed to in the trust document
Most people who become the trustee of someone else’s trust don’t have much, if any, experience fulfilling all of a trustee’s legal duties, especially with respect to sending out required notices, handling tax matters, and preparing the trust accounting paperwork in a timely manner.
We assist trustees in getting everything done right, and on time. Contact us today to discuss today to discuss how we can help you.