Huntington Beach Post-Death Trust Administration Attorney
The loss of a loved one in Huntington Beach, CA can result in a significant amount of stress and emotional hardships. When determining how to distribute their assets, a giant legal battle can arise, only making your situation more overwhelming. You and your family should be focused on moving forward from your loved one’s death, not trying to work your way through a complex legal system. If they planned their estate prior to their death, you may be able to manage their trust and ensure that the distribution of property and assets runs accordingly.
A living trust allows one to distribute their assets in a specific way after they’ve passed away. Setting up a trust, as well as electing someone to manage it after your death, can be challenging. Some opt to create a will instead, but wills can fall into probate, which means it’s subject to a lengthy process that determines if the will is legitimate. While trusts tend to be more expensive and complex, they’re essential for those wanting their estate to be managed properly.
Our team at The Flanigan Law Group understands how daunting the trust administration process can be, but we’re prepared to help you navigate it in a reliable manner.
What Is a Trust?
Trusts are legal documents that detail how a grantor, or the creator of the trust, wants their estate, property, and assets to be distributed after their death. The person who is responsible for managing the trust after their death is called the trustee, and the people who inherit their assets are known as beneficiaries.
The two main varieties of trusts recognized in California are revocable trusts and irrevocable trusts.
A revocable trust enables the grantor to modify certain parameters while they’re still living. When the grantor passes away, however, the trust often becomes irrevocable, preventing anyone from modifying the trust. Most people choose to create a revocable trust in case they need to make changes or because these are generally more flexible. For instance, if someone makes a revocable trust, they can change certain terms if their marital status changes.
An irrevocable trust, however, cannot be modified at all. When the grantor signs off on it, whatever terms are listed are what must be carried out when they die. One advantage of this type of trust is the ability to save on taxes, as this type of trust is considered a separate tax entity.
Trust vs. Estate
While trusts are mentioned frequently in estate planning, these are both different concepts. The main point to remember is that an estate encompasses all the assets that a person has, whereas trusts control the assets within a trust.
For an asset to be managed in a trust, the title of the asset must be transferred into the trust. If any assets weren’t put into the trust prior to the grantor’s death, these will be considered part of the estate. Estates can be subject to probate, which may complicate some legal matters. Trusts cannot be subject to probate, which is why many opt to create a trust in the first place. Trusts are also not appointed by a court, meaning that you can administer a trust immediately following the death of your loved one. However, if the trust requires a court appointment, you must abide by this term.
Understanding the differences between trusts and estates can be challenging, especially if you’re still working to understand your responsibilities when the time comes. With the help of a Huntington Beach estate planning attorney, you can ensure that you complete your tasks reliably.
How to Administer a Trust
If you’ve been named as a trustee, or the person who manages the trust before or after the death of a loved one, you’ll be responsible for administering the trust. The beneficiaries listed in the trust are the people who will inherit their assets. There are several tasks you must perform during this process, but a qualified trust administration attorney can help.
When your loved one passes away, if you are the trustee, you’ll be responsible for doing the following:
- Gather Relevant Documentation: Before doing anything, it’s crucial that you gather the trust document, death certificate, estate plan documents, and anything else that’s relevant to the situation. In some cases, the creator of the trust, sometimes referred to as the “settlor,” will let you know where some of these documents will be. If you can’t find certain documents, the administration can’t proceed, and your case may need to go through probate court.
- Notify the Beneficiaries: You must provide official notice to the beneficiaries that the settlor has passed and that they will inherit certain assets. This is mainly done in case anyone decides to contest the trust. You have 60 days to notify the beneficiaries according to California law. This step can be done with the help of a trust administration lawyer.
- Identify the Assets: As the trustee, you’ll be responsible for preserving the assets in the trust and ensuring that they go where they’re supposed to. You could be held liable if assets go missing or are destroyed. By getting help from a professional appraiser, you can determine the value of each asset and where they go.
- Identify and Settle Liabilities and Debts: Simply put, you’ll need to determine whether the settlor had any debts before their death. If they had enough of an estate to cover their debt, the estate may be able to pay the debt. If you neglect this, you may be held accountable.
- Efficiently Manage the Trust: You’ll need to obtain titles to each asset, rent or sell property, and file tax documents to ensure that you don’t get met with strict penalties.
- Distribute the Assets: After the above steps have been completed, you can begin distributing the assets to the beneficiaries listed in the trust. The terms must be in accordance with California law, and some assets may remain in the trust depending on the circumstances. You may have to spend years abiding by a trust’s requirements. If you need assistance from attorneys, accountants, or real estate agents, it’s encouraged to ask them.
- Terminate the Trust: Once you’ve completed all the requirements that the trust entails, you can terminate it.
These steps are time-consuming and require careful analysis and judgment. It’s easy to feel overwhelmed by your responsibilities, but you can complete your tasks with the help of a qualified attorney.
The Process of Asset Distribution
Assets can be distributed in various ways, but there are three methods that are the most common.
The grantor can elect to distribute their assets outright once they die. While this is the most straightforward way of distributing your assets and money, you have no protection in case a beneficiary blows the inheritance immediately.
You can also choose to distribute assets periodically. For example, if the grantor wants to give money to a beneficiary once they turn 18 or get married, they can opt to do that. This prevents a beneficiary from inheriting your assets only to squander them instantly.
Lastly, a grantor can let the trustee decide how assets will be distributed. Known as a discretionary trust, this is made for beneficiaries who are known to have financial issues. If you believe that a trustee is knowledgeable enough to make the right decisions after your death, you can choose to create this type of trust. A trustee can withdraw money from a trust or withhold it from a beneficiary in certain cases, but you may want to speak with a trust administration lawyer about this first.
How Long Can a Trust Last?
According to California law, a trust can stay open for up to 21 years after the death of the last person who was alive at the trust’s creation. That said, this is rare in California, as trusts usually dissolve after a grantor dies and the assets are distributed. There are also some exceptions to the rule, and these tend to be more common:
- Special Needs Trust: If a trust is created to benefit a beneficiary with a disability, the trust can last until the death of the beneficiary or until the funds in the trust run out.
- Trust With Spendthrift Provision: In this form of trust, the beneficiary will receive a certain amount of money annually rather than receive a lump sum. This also allows the trust to remain open if there’s still money in the trust to manage.
- Charitable Trusts: Some grantors may create a charitable trust, which allows someone to receive income for up to 20 years or for the duration of a non-charitable beneficiary’s life. Once either case is fulfilled, the rest of the donated assets go to at least one charity of the grantor’s choosing.
Every trust includes different details, and all trustees should fully understand how long their trust will last so they understand what will happen to the relevant assets.
How Much Time Does Trust Administration Take?
It may take at least a year to settle a trust in California. There are several factors to consider when determining how long you’ll be administering a trust, mainly which assets the grantor owned prior to their death. If certain assets weren’t properly transferred into the trust, it may take more time for the trust to complete. The time it takes to administer the trust also depends on whether you hired legal assistance. While you can address this matter on your own, it’s recommended to have an attorney walk you through the process if you’re unsure about any aspect of it.
While a trust itself can last for decades, actually administering it and completing all required tasks can take one to two years, generally. No situation is the same, and you may be better off hiring a Huntington Beach estate planning lawyer to help you with each step of the process.
The Benefits of Trust Administration Attorneys
You may believe that once a grantor dies, you just have to follow the steps in the trust without hassle. However, even if a trust is that straightforward, there are several benefits of hiring an attorney to help you along the way.
If you’re a trustee, and are worried about making potential mistakes, you may want to consider hiring an experienced attorney. This can keep you from making careless mistakes and accumulating penalties and fees. This also prevents a beneficiary from accusing you of criminal activity related to the trust. Administering a trust requires careful attention to detail, and you may be unsure what to look for or recognize.
A knowledgeable Huntington Beach attorney knows what steps are included in the administration process as well as how to properly complete each one. As with any other legal matter, this one includes a lot of paperwork and time to sift through. If the grantor was a loved one, you may not be thinking fully rationally, preventing you from doing your duties as well as usual. For these reasons, it’s ideal to have an attorney ensure that you’re doing what’s right while also abiding by California law.
Huntington Beach Post-Death Trust Administration Attorney
Administering a trust after a loss can be a challenging feat. However, you don’t have to do this on your own. With the help of an experienced attorney, you can perform your required tasks without risking penalties due to mistakes. If there’s a dispute over how assets should be distributed, or if certain documentation needs more analysis or certification, an attorney can help you figure out how to move forward. If you’re administering a trust in the Huntington Beach area, we can help.
The Flanigan Law Group has worked with many clients over the past decade who needed assistance with estate planning and trust administration. These legal matters must be taken care of diligently, and we understand what to look for when administering trusts. While you focus more on your family and moving forward from your loved one’s death, we can resolve any disputes that have arisen and ensure that all beneficiaries receive the assets they’re entitled to.
For information on trust administration and how we can help, contact us today.