Establishing a trust goes a long way toward responsible estate planning. You can name a trusted friend or family member as the trustee or use a trust administration service. After your passing the trustee takes steps to administer, or follow, the trust document.
What is a trust?
The term trust often refers to a legal document instructing a trustee how control and transfer assets to another person or entity. The most common trusts created in estate plans are revocable living trusts. The term revocable living trust refers to a changeable document created while the trust creator (settlor or trustor) is living. The trust often directs preferences for asset management and distribution. Your trust works in conjunction with the settlor’s last will and testament.
Many people know the term trust fund, which often refers to an irrevocable trust. For example, a parent my create a dynasty trust or special needs trust for a child. The irrevocable trust is named as the beneficiary of a revocable trust or even a life insurance policy. The irrevocable trust provides legal protections to the child she could could not give herself.
Certain revocable living trusts might require assets be controlled for a child until reaching a certain age, typically 21, 25, or 30. Before that time, the trustee will be able to use the trust assets for the beneficiary and to pay for trust expenses.
Who administers a trust?
The trust will name an individual or organization as the trustee. This person or organization manages the money and other assets in the trust as well as distributing them or their residuals or dividends to the trust beneficiaries. Some financial institutions provide a department that specializes in trust administration services. Individual professional, called California licensed private fiduciaries, can also be named.
After the settlor’s passing, the trustee follows the instructions in the trust document and California law to operate, or administer, the trust. Being a trustee is not easy and can be a thankless job. The trustee must act for the benefit of the trust beneficiaries while following strict timelines and controls required by law. Beneficiaries may not be aware of the limits under which the trustee operates.
We have decades of legal experience and can help the trustee to operate the trust safely and efficiently. Contact Keyes Law Group, PC to discuss trust administration.