A well designed and thorough estate plan can accomplish a wide range of inter-related estate planning goals and objectives. Of course, to accomplish all of those goals a plan typically must incorporate a number of different estate planning strategies and tools. One of the most common of those tools is a trust. Although trusts have evolved to the point where there is a specialized trust for almost any estate planning objective, all trusts share a few basic elements, including a Trustee. If you recently learned that you were appointed to be the Trustee of a trust, and you have never before served as a Trustee, you are likely feeling somewhat intimidated at the prospect of doing so now. The following steps involved in Vernon Hills trust administration should give you some idea of what your new role as Trustee will entail.
Before discussing steps involved in administering a trust, it may help to go over some basics. A trust is a legal arrangement whereby a third party (the “Trustee)’, who is appointed by the first party (the “Settlor”) protects and manages assets for the benefit of a second party (the “Beneficiary”). The overall job of the Trustee is to manage and invest trust assets and administer the trust according to the trust terms created by the Settlor.
Vernon Hills Trust Administration Steps
If you were appointed to be the Trustee of a trust it means that the Settlor had a great deal of confidence and trust in you and your abilities. Although no two trust agreements are exactly the same, there are some steps that are common to the administration of most trusts, including:
- Read the trust agreement thoroughly. Not just a cursory read through – take the time to read through the entire trust agreement several times until you feel like you understand every word.
- Determine the type of trust and trust p purpose. Trusts are first divided into two broad categories – testamentary and living trusts. If the Settlor of the trust is still alive, it is clearly a living trust because testamentary trusts are activated by a provision in the Settlor’s Last Will and Testament. Of utmost importance, however, is determining if the trust is revocable or irrevocable so you know if the Settlor retains the ability to modify or revoke the trust. You also need to know what the overall purpose of the trust is so that can perform your duties as Trustee well.
- Consult with an experienced trust attorney. Do not try to administer a trust by yourself. An experienced trust attorney can provide you will legal advice and help you make discretionary decisions if that authority was given to you in the trust agreement.
- Start keeping records. Administering a trust involves a considerable amount of paperwork and record-keeping. Make sure you keep detailed records in the event you ever need them to defend yourself or your position.
- Check on the safety of trust assets. Shortly after you learn of your position, take the time to check on all trust assets to ensure that they are accounted for and safe.
- Communicate with beneficiaries. Throughout your job as Trustee, you will be required to communicate, even work with, the beneficiaries of the trust. To help you develop a positive relationship with them, start early and keep the lines of communication open throughout your time as Trustee.
By following these steps, your role as Trustee should get off to a good start. Keep in mind, however, that making a mistake could be costly, both in terms of time and money. To help avoid a mistake, work closely with a Vernon Hills trust attorney.
Contact a Probate Lawyer
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns regarding the steps involved in Vernon Hills trust administration, contact an experienced trust attorneys at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.