Category: Trust Administration

Trust Lawyer in Houston Answers, “What is a Trustee?”

When you work with a trust lawyer in Houston to set up a trust, you will be asked to name a trustee. Before you can select someone for this important job, you need to fully understand the role and responsibilities this person will be given.

A trustee is the person who will manage the assets that are in your trust. Many people choose to be their own trustee and can continue to manage their affairs as normal. Married couples can be named co-trustees. In that case, when one dies, the other can continue to make financial decisions without any other legal steps needed.

You can also name a successor trustee. A successor trustee is the person who will take over your decision-making if you (or the co-trustee) are no longer able to do so. In some cases, several successor trustees are named in case the previous one is unable to serve. In other cases, people choose to select two or more adult children who will act together. Some people choose a completely unbiased corporate trustee, usually a bank or trust company, who will take over decision-making.

The following list contains some of the responsibilities that are required of a trustee:

  • Make decisions regarding assets in your trust. This typically involves managing the trust investments, property and making decisions that are in the best interest of the trust beneficiaries. Assets must also be managed according to the terms of the trust and governing law.
  • Keep detailed records for all of the trust transactions.  All transactions need to be accounted for by maintaining a record of receipts and other documentation.
  • Comply with all federal and state law requirements. It is critical that a trustee follows the terms of the trust documents and the trust creator’s instructions. Additionally, a trustee is responsible for complying with federal and state laws, meeting any reporting requirements, and filing federal and state taxes.

Administering a trust is often complicated and confusing. The trustee not only has to manage the details of the trust, they are also dealing with emotions and conflicts that can arise among the beneficiaries of the trust. That is why many trustees contact us to assist. We can help you avoid all of this by walking you through the entire trust administration process. Doing so will relieve you of tremendous stress and might help you avoid litigation brought on by unhappy beneficiaries.

MANY HARRIS COUNTY ESTATE PLANNING LAWYERS’ CLIENTS OVERLOOK THIS IMPORTANT ASPECT OF TRUST ADMINISTRATION

One of the most enjoyable parts of being a Harris County estate lawyer is helping clients set up trusts. Knowing that they have the ability to positively impact future generations or even a cause they care about can be a life-changing experience for a person. The fact that estate planning lawyers are a part of it is almost a bonus to the job. There is an area, though, that so many clients forget, and if it goes without being caught, it can cost the trust and heirs a great deal in the future.

Setting up the trust can be a lot of fun. Figuring out how to fund it is deeply satisfying. Naming trustees and heirs is profoundly rewarding. Directing how the funds will be managed is…very often overlooked.

Yes, despite putting so much effort, and even a sense of personal value into setting up the trust, a huge number of people do not think about the importance of how the money will be managed later. If you do not provide guidelines for how the assets of the trust are to be managed, it is quite possible that your family or other heirs will suffer for it.

Here are just a few ways that trust lawyers in Harris County have seen this situation go poorly:

1. Some institution is put in charge of administering the trust, but with little oversight. The financial advisors are given too much freedom to play “fast and loose” with the money, as well as to charge exorbitant fees. This institution and the advisors it hires do not have much concern beyond what they can get out of the trust.

2. A friend or family member is put in charge of the trust with the best of intentions, but unfortunately, he or she does not have the right skill set to manage the funds. This person, though someone you trust, just does not have the knowledge and experience required to make good investments, to minimize tax implications, etc. To make matters worse, if this person’s efforts are not “good enough,” it can anger the other heirs.

3. A “directed trustee” is chosen to look after the trust according to specific instructions from you. These may include professional companies that do nothing but administer trusts. In addition to knowing the organization has experience, you can also provide guidance on the principles that you want followed when it comes to investments and other decisions.

By having your estate planning lawyer include directions for a directed trustee, you can mitigate some of the concerns that come with choosing a family member or giving a financial planner too much leeway to make decisions for the trust. Obviously, you cannot predict how markets will change and what new developments will arise after your death, but you can determine good approaches for now and potentially give your trustee some discretion if and when it is appropriate. Again, a Harris County trust lawyer will be instrumental in creating the language needed to guide the directed trustee and others involved with the trust.

A CLOSER LOOK AT WILLS AND TRUSTS ADMINISTRATION IN HOUSTON

Wills and trusts administration is a big category of law, and it can be a little confusing to understand exactly what it all means. The specifics of this type of work will vary from state to state, so what happens in Texas will be slightly different from how it all takes place in any other state. For the most part, though, wills and trusts administration involves the following:

Assets Passed Under a Will

The wills and trusts administration lawyer in Houston will be helpful to the executor of a will in figuring out what assets are included in an estate. He or she will assist in figuring out what the debts are, as well. Then the entire estate will be guided through the court process known as probate in order for the assets to be distributed appropriately with the will in mind.

Estates Without a Will

Wills and trusts lawyers in Houston can also be instrumental, even when there is no will. They can assist with the probate process, working with the person chosen as the executor to meet all legal obligations. Because there is no will to direct the distribution of assets, the courts will have a bigger say in what goes to whom.

Administering Trusts

This item is a little more obvious, considering we are talking about wills and trusts administration! In cases where there is a trust, the attorney will work with the trustees or beneficiaries to figure out what kinds of rights and obligations will come into play. Working together, the entire team will find ways to meet the requirements of the trust.

Tax Implications

Finally, a wills and trusts administration lawyer in Houston will be instrumental in helping beneficiaries and trustees navigate the myriad of tax implications that come along with an estate. If the decedent created a trust, it may have been for the very purpose of protecting assets from exorbitant taxes in the first place. A good lawyer will continue this trend in order to ensure the trust remains as valuable as possible.

Anyone who has been named as the executor of a will or a trustee should definitely consider hiring an attorney in Texas to guide the process. From probate to appointing an administrator to settling any legal proceedings for the estate, this professional can protect the overall worth, as well as speed the process. They can also assist or make referrals for beneficiaries who find themselves in need of their own advice after inheriting wealth.

A HOUSTON TRUST LAWYER’S TIPS FOR PREVENTING IDENTITY THEFT OF A DECEASED LOVED ONE

As if losing a loved one is not hard enough, will and trust lawyers around the country have been seeing an increase in identity theft of those who have passed away. This creates considerable difficulties to the surviving family and really does add insult to injury. In order to protect your loved one’s name, take this advice; and if you suspect there has been an identity theft, you may want to reach out to a trust lawyer in Houston.

The practice of unscrupulous people using a deceased’s identity is called “ghosting,” and about 2.5 million deceased Americans’ information is being used every year. During the time shortly after death, criminals are able to use social security numbers and other information to apply for loans and credit cards, along with a variety of other misdeeds. Some even file tax returns for those who have passed away and then receive the refund!

Trust lawyers in Houston are advising family members on ways to protect the information of their deceased loved ones. Most of the criminal activity takes place within the first six months while different systems, institutions, and government entities are registering the death. You can help speed up this process and also limit thieves access to information in several ways:

· Call the Social Security Administration to report the death.

· Send copies of the death certificate (via certified mail with a return receipt) to all three of the credit-reporting bureaus, asking them to placed a “deceased alert” in the credit report.

· Send death certificates to any place the deceased may have had an account (bank, mortgage company, credit card providers, etc.) Again, have them list the individual as deceased.

· Cancel their driver’s license.

Many of the identity thieves get their information by looking through obituaries and gathering enough data to find the individual’s social security number. To limit this, make sure the obituary does not contain the kind of information that would make this easier, such as a birth date or mother’s maiden name.

Following Up

A few weeks after taking care of these tasks, you will want to order copies of the deceased’s credit report to look for any activity. Do this again a few months later to ensure that things are still staying quiet.

Trust lawyers in Houston do advise that fraudulent charges made by identity thieves are generally not the responsibility of surviving family members. While this is some consolation, it does not stop the sense of injustice that comes with knowing your loved one’s name and information was used inappropriately. Taking the steps above can help to prevent this kind of crime and to catch it early if needed.