For many people, the use of a trust is an important part of their estate plan. Trusts are financial devices that can help limit tax burdens and avoid probate under the right circumstances.
Every trust has a trustee, and that individual is tasked with carrying out the terms of the trust after the trustor passes away. Trustees owe a fiduciary duty to the beneficiaries of the trust, meaning any mistakes they make could have steep consequences. A practiced estate planning attorney could assist with the administration of these trusts in an effort to minimize these errors. If you have been appointed as a trustee of an estate, a Houston trust administration lawyer might be able to help.
Understanding the Role of a Trustee
In most cases, administering a trust begins at the time of the trust creator’s death. How long the process of administration takes depends entirely on the language of the trust agreement. Some trusts are designed to wrap up in short order following the death of the creator. Other trusts are intended to continue in perpetuity.
The first step typically involves the trustee taking stock of the trust agreement and identifying all of the applicable beneficiaries. Once this step is completed, the trustee must contact each beneficiary and advise them of their status.
The trustee is also responsible for assessing and preparing the assets held by the trust. This role requires more than just keeping tabs on the property in the trust’s possession. It is also the responsibility of the trustee to invest these assets when necessary to protect their value. Managing the investments of a trust is one of the most important ways a trust administration lawyer in Houston could assist a trustee.
There are also debts that must be dealt with in most cases. The trustee is responsible for paying any liabilities of the trust before they can distribute any assets to the beneficiaries. This includes not only dealing with standard creditors of the trust but also with tax authorities as well.
Once the debts are paid and tax returns are submitted, it is time to distribute assets to the beneficiaries. This process is carried out according to the written instructions in the trust document.
Types of Trusts
Understanding the types of trusts available in Houston could be helpful to anyone appointed as a trustee. This is because the trustor’s ability to replace a trustee during the course of their lifetime can vary dramatically depending on whether a trust is revocable or irrevocable. A trust administration lawyer in Houston could provide a trustee with clear guidance on how either of these types of trusts could impact their duties.
A revocable trust—as the name implies—can be changed by the creator of the trust with relative ease. During the course of their life, the trustee could alter the terms of the trust, including selecting a different trustee. Irrevocable trusts are not so easy to alter. In most cases, it takes court intervention to remove a trustee and appoint someone new.
Reach Out to a Houston Trust Administration Attorney Today
There are many steps—both large and small—that a trustee must undertake when administering a trust. A misstep during any of these steps could breach the trustee’s fiduciary duty and potentially lead to financial repercussions.
To ensure you meet your responsibilities as a trustee, let a Houston trust administration lawyer guide you through the process. Call right away to schedule a consultation.