Newport Beach Post Death Trust Administration Attorney
One of the last things you can do for a loved one after their death is to ensure their final wishes are carried out. This becomes even more important if that person trusted you to be their trust executor. Closing their estate according to their desires is a high honor that they have bestowed on you. Unfortunately, this high honor does not come without complications, as the legal process around closing trusts can be complicated and confusing. Failing to follow the law can cause issues that delay the asset disbursement to the heirs, potentially causing hardship for both them and you. The best way to ensure that trust administration is handled correctly is to speak with a trust lawyer in Newport Beach, CA.
For more than a decade, The Flanigan Law Group has provided our community with experienced and knowledgeable estate planning and administration. We understand that each client’s goals, assets, family dynamics, and wishes for the future are unique, so their estate plan must be specifically tailored to meet their needs. It takes years of working on trust administration cases to effectively craft and follow through with an estate plan from conception to distribution to heirs after the trustee’s death. The Flanigan Law Group’s team has this depth of expertise. We use it every day to ensure our clients’ final wishes are handled delicately.
What Is a Trust?
Trusts are legal arrangements that are created so that a party’s assets are held by another party for the benefit of the original party. There are two types of trusts with respect to when they are created. A living trust is created during a person’s lifetime, and a testamentary trust is created after a person’s death. Although Americans have many different options when creating a trust, there are a few terms that should be understood before beginning the process.
- Grantor or Settlor: The person or entity who establishes the trust.
- Trustee: The party or institution that controls the trust for the benefit of the grantor and beneficiaries. The trustee may be the grantor and have a successor trustee named after their death.
- Beneficiary: The person or entity that was named by the grantor to inherit property within the trust.
- Executor: A party or entity that is responsible for distributing assets according to a last will and testament after another person’s death.
- Decedent: A person who has died and has unsatisfied legal obligations.
- Revocable Trust: The grantor can change the trust at any time and for any reason.
- Irrevocable Trust: The grantor is unable to change or alter the trust without the permission of the trustee or beneficiaries.
Regardless of the type of trust, they are meant to hold a person’s assets and property while they are living. After the grantor’s death, their contents will be distributed to the designated beneficiaries. They are useful in reducing taxes, protecting assets from creditors, and avoiding probate. Trusts are also not just for wealthy individuals. Anyone with a need to protect their assets can create a trust.
Benefits of Creating a Trust
There are a plethora of benefits to creating a trust as part of your estate plan.
- Reduce the Likelihood of Your Final Wishes Being Contested: If your property is transferred only through a last will and testament, there are chances for someone to successfully contest the property transfer. When you control the transfer of your property with a trust, you remain involved with the trust throughout your lifetime. The chance that someone can effectively contest your will reduces as a result.
- Avoid Probate: It can be a drawn-out and complicated process for property to go through probate. This means that the estate’s heirs may be waiting an extended period for their inheritance. Probate can also be expensive, totaling up to 7% of the estate.
- More Flexibility: If you choose to create a revocable trust, you can alter the trust agreement terms at any time with amendments to the document. You can adapt the trust to your current circumstances and accommodate any changes, like adding or removing beneficiaries.
Understanding Post-Death Trust Administration
There are typically many issues that must be dealt with after a loved one has passed away. Post-death trust administration ensures that these situations are closed out properly. Post-death trust administration is the process by which a decedent’s legal and financial affairs, specifically those relating to a trust, are handled following their death.
Although a trust may seem simple to act on following a person’s death, there can be severe legal penalties if the distribution of assets is not handled correctly. This is where a Newport Beach post-death trust administration attorney can help. They will have extensive experience implementing trusts and closing them down after the grantor’s death. This ensures that the decedent’s final wishes are carried out properly, and you are protected from any legal ramifications.
Required Legal Documents
Administering a trust following the grantor’s death will require the deceased’s legal documents. These are necessary to begin transferring the property in the trust to the beneficiaries. Potential documents you may need to have on hand include:
- Death Certificate
- Original Trust
- Original Last Will and Testament
- Inventory of Assets
- Deeds and Titles for Property Within the Trust
- Statements From Financial Companies or Banks
Trust Administration Checklist
If you are the trustee of a trust established by a recently deceased grantor, you are probably dealing with the added stress of administering the trust while also grieving for your loss. This checklist of important tasks can be a starting point to help you move forward with the trust administration process.
- Take possession of all relevant legal and financial documents.
- Submit the decedent’s original will to the county court.
- Read through the documents to ensure that you understand the trust’s instructions and your duties.
- Contact a financial adviser with trust administration experience.
- Transfer the assets into the trust.
- Create a separate bank account for tax purposes and to pay trust expenses.
- Acquire the keys and codes to the property within the trust.
- Secure the property for safekeeping.
- If applicable, creditors must be paid from the trust assets.
- Send notices to the heirs and beneficiaries of the trust.
- Keep thorough records to protect yourself if questions arise regarding your position as trustee. This can also ensure that you are properly compensated for your role.
This list is not comprehensive, as different types of trusts will require different duties from the trustee. Even trusts of the same type will have specific nuances because the grantors of the trusts will have different desires and wishes. If you have any concerns about your role as a trustee following the grantor’s death, it is vital to speak with a knowledgeable trust administration attorney. They can provide invaluable guidance and information as you move through this delicate process.
Common Legal Obstacles and Delays in the Early Stages
Trusts play an essential role in estate planning. They can be used to:
- Avoid probate.
- Protect assets.
- Reduce tax liability.
- Delay distribution to minor beneficiaries.
However, there are issues that trustees can encounter as they begin administering the trust. Some of these potential issues include:
- Disputes Regarding Authority: There is the possibility that others will challenge the trustee’s authority over the trust assets. This is most common following the grantor’s death, while the trustee is attempting to take control of the trust assets. This is typically resolved with a review of the trust. However, vague wording or errors within the trust can make it more complicated to verify the trustee’s identity.
- Accusations of Trust Funds Mismanagement: An heir or beneficiary of the trust may allege the trustee did not manage or invest the assets in the best interests of the beneficiaries. These allegations typically arise when a beneficiary disagrees with how the trustee is performing their duties. The trustee can mitigate any potential wrongdoing by speaking with legal and financial experts before making decisions for the trust.
- Outdated Provisions or Terms: Depending on how and when the trust was created, it may contain outdated or void terms and provisions. The trustee may need to acquire court approval before acting on unclear or outdated portions of the trust.
- Demands for Trust Distributions: The trust document should contain specific conditions and directions for any distributions to be made from the trust. However, it is common for trustees to be given discretion regarding disbursements. Disputes can arise when beneficiaries believe they are entitled to trust assets, but the trustee disagrees. The trustee can do so on the condition that the distribution would be harmful to the trust or beneficiaries.
- Incapacitated or Deceased Beneficiaries: A trustee can encounter issues with trust administration when a beneficiary dies or becomes incapacitated after the trust’s creation. If the trust does not contain an amendment to account for these situations, direction from the courts may be required to proceed with trust administration.
- Lack of Authority Over Assets: The trustee only has authority over property that has been correctly transferred into the trust. The grantor may have failed to take the necessary legal steps to transfer the property from their estate to the trust. The trustee cannot administer those assets unless they can successfully petition the courts.
- Contests of the Trust: The trust agreement or certain conditions of the trust can be contested by beneficiaries or other parties. The trustee and beneficiaries that support the trust may need to fight this in court with skilled attorneys. This can ensure that their rights and the desires of the grantor are protected.
Any one of these issues can be stressful, time-consuming, and costly for a trustee or beneficiary to handle. Even though you believe you are in the right concerning the trust, a legal fight can feel overwhelming. A California estate planning attorney can help you determine the best route for defending your stance concerning the administration of a trust. Even after death, the decedent deserves to have their wishes honored. The best way to ensure this during a trust administration complication is with the assistance of an attorney.
Trustee Duty to Provide Notice
A trustee is required to provide a notice to beneficiaries and heirs in a few circumstances, but there are two especially common ones. All the circumstances that require notice are covered in California Probate Code Section 16061.7.
The first instance that requires notification is when a revocable trust becomes irrevocable. There are many instances where this occurs. However, it is most common when one or more of the grantors passes away or the terms of the trust make it irrevocable. When this occurs, the trustee must serve notice to the beneficiaries and heirs of that trust.
The second is when the trustee of an irrevocable trust is changed. A trustee may choose to stop serving in the position for any reason, including personal or health reasons. They may also be removed from the position by the court if they commit a breach of trust.
This notice must be served to the heirs and beneficiaries within 60 days of the event that caused the need for the notice. There is specific phrasing that must be part of the notice, and there are font requirements as well. An estate planning attorney can help you craft this notice and ensure that all the legal requirements are met.
Trustworthy Newport Beach Trust Attorney
The Flanigan Law Group has been a valuable estate planning resource for our community. We understand the importance of protecting your assets, both for yourself and your beneficiaries after your death. We can help with every aspect of a trust, from creation to administration.
For over a decade, our team has crafted highly customized solutions to secure our clients’ interests. Our extensive experience in estate litigation has equipped us with the tools to aid struggling trust administrators through their difficult tasks. Our firm can support you as you make your loved one’s final wishes happen. We can confidently handle every aspect of trust administration, allowing you time and space to grieve. Contact The Flanigan Law Group today to discuss us taking over the legal and financial responsibilities of the trust so you can focus on your family.