While death is not the most joyous topic to discuss, it is important to understand critical legal processes that must be handled after someone has died. One such legality is the process of distributing a trust. A trust is a legal decree of estate planning that stipulates how a person (often referred to as the trustor, grantor, or settlor) wishes their assets to be distributed after their death. The responsibility of distributing trust assets lies with the person (or people) named as the trustee by the now deceased.
The most common types of trusts are:
- Revocable family trusts
- Revocable living trusts
- Irrevocable family trusts/asset protection trusts
- Special needs trusts
- Irrevocable life insurance trusts
Each type of trust has a unique purpose, but they all serve to honor the final wishes of the trustor.
The people named as the recipients of the assets in a trust are called beneficiaries. The beneficiaries are usually family members and friends, but charities are also commonly listed to receive money or other assets from someone upon their passing. The process for distributing a person’s assets depends on the type of trust and the types of assets requiring distribution.
If you are a trustee or beneficiary in need of legal assistance in California, one of the trust administration attorneys at The Flanigan Law Group can help.
What Are the Responsibilities of a Trustee?
The trustee is the person (or people) who ensures the trustor’s wishes are upheld according to the trust document. After the death of a trustor, the trustee must oversee the process of settling the trust. All legal formalities must be properly addressed before beneficiaries receive their inheritance.
In California, trustees are held to a high standard. They are expected to conduct the business requested in the trust document with honesty and integrity. Furthermore, a trustee is expected to act in good faith and make decisions that serve the interests of the trust’s beneficiaries.
These are the steps a trustee performs in handling the final affairs of the trustor:
- Funeral arrangements. The trustee must oversee the funeral planning for the trustor and make sure the arrangements are made and carried out as the trustor wanted.
- Obtain proof of death. A trustee has to get certified copies of the trustor’s death certificate. There should be enough copies of the death certificate to notify the necessary offices responsible for settling each asset in the trust. This typically includes banks, insurance agencies, real estate companies, etc.
- Conduct inventory of the assets in the estate. This step helps give a trustee an accurate picture of which assets should be distributed to the trustor’s beneficiaries via the trust document.
- Contact a trust administration attorney. Using the trust document, a trustee must check off the items inventoried to be distributed. Working with a trust administration attorney, like one of the experts at The Flanigan Law Group, a trustee can ensure they are meeting all necessary deadlines to fulfill their fiduciary responsibilities.
- Appraisal of assets. All assets of the trustor should be appraised for accurate assessment of value. This can include homes, artwork, jewelry, cars, antiques, and other collectibles. Protecting the trustor’s assets until they can be properly distributed must be a top priority and requires quick action on the part of the trustee. This will lessen the chances of family members wrongfully taking possession of assets before distribution.
- Paying off outstanding debt. All debts, including credit cards and loans, must be paid off during this step. A trustee may have to sell items listed in the trust to cover these debts, especially if they require ongoing payments for maintenance, such as a mortgage payment. If this becomes a point of contention with beneficiaries, the trustee should be transparent and seek the advice of their trust administration attorney as they proceed.
- Paying estate taxes. To secure and maintain assets that require ongoing payment, a trustee must prepare and file the final federal and state income tax returns on behalf of the trustor.
- Distribute assets. Once all of the aforementioned steps have been completed, the trustee can move forward with contacting beneficiaries for asset distribution.
What Forms of Inheritance Can Beneficiaries Expect from a Trust?
Family members (spouses and children) for whom a deceased person was directly responsible for providing financial care are the most common beneficiaries listed in a trust. Others, such as extended family, friends, colleagues, and charitable organizations, also receive inheritances in certain circumstances. Inheritance from a trust can be any item a trustor deems valuable and wishes to grant to a beneficiary.
The major types of assets a beneficiary can expect from a trust may include:
- Homes, land, and/or investment real estate (real property)
- Bank deposit accounts
- Stocks, bonds, and money market accounts (portfolio investments)
- Life insurance policies
- Antiques and collectibles
How Long Does It Take to Receive Trust Inheritance?
In most cases, a trust takes 12-18 months to be distributed to beneficiaries. This allows time for appraisals, debts, taxes, and other legal aspects of the estate to be properly settled.
Experienced Attorneys at The Flanigan Law Group Can Assist With Trust Administration
Unlike other firms that take a one-size-fits-all approach to helping clients settle important matters that arise through trust administration, we offer knowledgeable representation whether you are a trustee or a beneficiary. We use experience and a thorough understanding of trust administration to expedite the process and ensure trust beneficiaries receive their rightful assets as quickly as possible.
Trustees can rely on us to guide them through the administration process, including the disbursement of real property, investments, stocks, money, or other assets specified in the trust document. At The Flanigan Law Group, we work with compassion and provide each trustee with a customized plan to fulfill essential fiduciary responsibilities, including resolving tax issues, completing bill payments, and distributing trust assets to beneficiaries. Our team tailors its efforts to the specific wishes of the decedent to serve the best interest of surviving loved ones.
The Flanigan Law Group: Your California Trust Administration Lawyers
We are here to lend our expertise to all matters related to trust settlements. For an initial consultation to learn more about how we can help you with trust administration, contact an Orange County Post Death Trust Administration for help.