What You Need To Know About
Post-Death
Trust Administration
What Do I Need To Know About Post-Death Trust Administration?
Post-death trust administration refers to the management and distribution of assets held in a trust after the grantor's death, typically in a revocable living trust that becomes irrevocable upon passing. A successor trustee steps in to handle the estate without court involvement, following the trust's instructions to pay debts, taxes, and distribute property to beneficiaries. This process is generally quicker—often completed in weeks to months—and maintains privacy since no public filings are required. Costs are lower, mainly involving trustee and attorney fees, without the probate court's administrative expenses.
Key Trust Administration Info
-
Steps Involved: The successor trustee identifies trust assets, notifies beneficiaries, pays final expenses and taxes, and distributes assets per the trust terms. Appraisals may be needed for tax purposes.
-
When Applicable: This applies to revocable living trusts or irrevocable trusts set up during life; it doesn't cover assets outside the trust, which may still require probate.
-
Role of Trustee: The successor trustee has fiduciary duties to act in beneficiaries' best interests, potentially facing legal liability for mismanagement.
-
Tax Considerations: Trusts may require filing a separate tax return (Form 1041), and estate taxes could apply if the value exceeds federal or state exemptions.
-
Benefits: Avoids probate delays and publicity, allowing faster access to assets for beneficiaries; ideal for estates with real property in multiple states to bypass ancillary probate.
Key Differences Between Probate and Post-Death Trust Administration
-
Court Involvement: Probate requires court supervision, including filings and potential hearings, while trust administration is handled privately by the trustee without judicial oversight.
-
Timeline and Cost: Probate often takes 6-18 months and costs 3-7% of the estate due to fees; trust administration is faster (1-6 months) and cheaper, typically 1-3% in fees.
-
Privacy: Probate records are public, exposing asset details and beneficiary information; trusts remain confidential.
-
Flexibility and Control: Trusts allow detailed instructions for asset management (e.g., staggered distributions), whereas probate follows the will or state law more rigidly.
-
Asset Coverage: Probate applies to non-trust assets without designations; trust administration only covers funded trust assets, so incomplete funding can lead to partial probate.
-
Suitability: Probate suits simple estates with few assets; trusts are better for larger or complex estates to minimize delays and costs. Note that laws vary by state—consult an attorney for jurisdiction-specific advice.
Click the link and schedule a call with a member of our team. We will explain our unique process for working with people from every walk of life. The call is FREE!
Start Protecting Your Legacy