Titling your assets in the name of a living trust will keep you and your family out of probate court. When you set up a living trust, you must re-title assets from your individual name to you as trustee of your trust, which you control. For example, Bob and Sue Smith, husband and wife, transfer assets to Bob and Sue Smith Trustees of the Smith Family Living trust. Legally you no longer own anything and everything belongs to your trust. If this is done properly, there is nothing for the courts to control when you die or become incapacitated. The concept is simple.
What Happens to a Trust Upon the Death of Its Maker?
Under most circumstances, you and your spouse will be the grantors creating the trust, and the trustees to manage everything within the trust. This will allow either spouse to maintain control if the other spouse becomes incapacitated or passes away. If both spouses are deceased, the successor trustee of your choice will manage the trust assets for your beneficiaries. If you have an independent trustee managing the trust for you while you are alive, they will continue to oversee the trust for your beneficiaries. Upon your death, your successor trustee pays your debts, files the tax returns, and distributes the assets. This is done relatively quickly, without court involvement, according to the instructions laid out in the trust
What is Involved in the Trust Administration?
A private trust administration ensures your assets are safely under the control of the trustee. You need to make sure your trustee understands the terms of the trust, as well as your beneficiaries, and that all trust documents, including bank statements, are in order. This will help your trustee invest trust assets such that they are preserved and available for current and future beneficiaries. Your trustee will administer the trust property according to the terms of the trust, including making distributions to the beneficiaries, whether it is a staggered distribution for a young child, discretionary distributions for a special needs trust, or distributions directly to financially capable beneficiaries.
The trustee makes all decisions according to the terms of the trust. Depending on your wishes, the trustee may have discretion as to when a beneficiary may or may not receive certain trust assets. The trustee prepares the trust records, and statements and tax returns as needed. Your trustee may also make tax decisions relevant to the trust and keeps all those records on file. The trustee will communicate regularly with the beneficiaries, including providing statements of accounts and tax records, and respond to questions presented by the beneficiaries so they understand the trust administration process.
How Long Does All of That Take as Far as the Trust Administration Goes?
The timing of the trust administration can vary. It depends on the assets involved, number of beneficiaries, and special circumstances of your particular case. If you are the sole beneficiary, the trust administration can be completed in a few weeks. If there are hundreds of thousands of dollars in assets and 20 beneficiaries, the trust administration could take several months to complete. On average, a trust administration can take somewhere between four and six months although.
Can Someone Realistically Handle a Trust Administration Without the Assistance of an Attorney?
Whether or not someone can realistically handle a trust administration without the assistance of an attorney depends on the complexity of your estate and of the trust agreement. If the only asset is one parcel of real property, then a non-attorney could probably get the property retitled into their name without the assistance of an attorney. However, they may not understand their legal obligations and duties if there are multiple beneficiaries involved. Frequently, dealing with financial institutions can be difficult. As such, the trustee may need legal counsel to deal with financial institutions.
Some people who try to do it on their own call me when they hit a roadblock. They may have failed to notice a beneficiary and now the beneficiary is contesting the trust or objecting to the conduct of the trustee. Difficult beneficiaries will point to minor details the trustee failed to address. Having an attorney will keep the trustee from making unforced errors, and ensure a smooth trust administration process.
What Sets You and Your Firm Apart in Handling Trust Related Matters in Tennessee?
The fact that my practice a boutique law firm dedicated to handling trust law and estate planning matters sets us apart from other firms in Tennessee. Many law firms do a little of everything, like personal injury and family law. They add estate planning to their list of practice areas to boost their bottom line, but they fail to appreciate the complicated nature of estate planning. We handle all types of estate planning and trust cases, like living trusts, irrevocable asset protection trusts, and special needs trusts. We are very knowledgeable in all areas of trust law. I would consider it a disservice to my clients to pretend to be knowledgeable in other area of law.