Trust administration occurs when a trustor (sometimes referred to as grantor, settlor or trust creator) passes away. It involves protecting assets for beneficiaries. There are many different types of trusts, but many of the basic rules for trust administration are the same.
Parman & Easterday attorneys are thoroughly familiar with the Kansas and Oklahoma Trust Codes, which affect the creation and administration of trusts. Our estate planning lawyers can provide you with advice on the creation of a trust, the naming of a trustee, and will advise trustees on the requirements for administration of the trust, both while the trustor is living and after he or she is gone. They can provide guidance to beneficiaries concerned that a trust established for their benefit is not being correctly managed or that trust administration is not being done properly after the trustor has passed away.
Understanding Trust Administration Basics
The obligations involved in trust administration vary based on the type of trust created and its trust provisions. Trusts must be effectively managed and administered upon the death of the trustor, so you should have custom legal guidance tailored to your needs. Some general rules of trust administration that apply in most situations include the following:
- A trustee has a fiduciary duty. This means the trustee owes the highest duty of care when managing and administering the trust. It is imperative that a trustee understand his or her obligations and act appropriately in the best interests of the beneficiaries. If a trustee breaches a fiduciary duty and beneficiaries suffer loss or damages as a result, the trustee can be held financially responsible.
- A trustee will need to provide notice to beneficiaries and creditors upon death. The trust administration process must be overseen by the trustee. Sending this notice is important because it triggers additional steps in the trust administration process, such as starting the timeline for beneficiaries to file a trust contest if they wish to do so.
- A trustee must ascertain the value and nature of assets that are held in the trust. Trustees must do a full accounting of the assets in the trust so its value can be determined and so all assets remaining after expenses have been paid can be transferred to the beneficiaries or managed effectively on their behalf.
- A trustee must develop a system of accounting and bookkeeping. Careful records must be kept regarding how trust assets are managed, including all income and expenses, to ensure all assets are accounted for.
- A trustee must oversee the transfer of assets to beneficiaries. When and how assets are transferred will depend on the trust and the instructions of the trustor. Sometimes, the trust continues to own and manage assets for beneficiaries after the death of the trustor. There may be conditions to be met before the assets can be transferred to beneficiaries, or only specified amounts of money may be transferred at specific times. Assets may begin to transfer to the beneficiaries immediately after the death of a trustor. It is up to the trustee to follow the guidance in the trust to make a determination on when and how property is to be transferred. The trustee must also take legal steps to facilitate the transfer when the time comes.
These are just a few basic things you need to know when it comes to trust administration. Having a comprehensive knowledge of rights and obligations is essential for any trustee.
Contact our Trust Administration Lawyers Today
Parman & Easterday has extensive experience administering trusts in Oklahoma and Kansas. We have represented trust creators, trust administrators, and trust beneficiaries and have helped all involved parties to understand their legal rights and obligations. We offer free seminars to provide essential information on trust laws and we also offer personalized legal advice and assistance.
If you are creating a trust, if you are responsible for administering a trust, or if you are concerned that a trust is not being administered correctly, give us a call to speak with a trust administration lawyer who can help you. Give us a call at (405) 843-6100 or (913) 385-9400, or contact us online to get the help you need today.