Trust Administration Frequent Questions

People create revocable living trusts in Florida in order to avoid the (mostly) cumbersome probate process. But in avoiding probate, does this mean that the successor Trustee avoids all attorneys? The answer depends on a number of factors.  The reality is that "settling" a trust may not be as easy as you may think, but it may not be that difficult either.

One of the first questions on whether an attorney is ended to settle a trust is how complicated are things?

• Are there many beneficiaries?
• Are there a lot of assets?
• Is a charity a beneficiary?
• Did the decedent die with creditors?
• Are there disgruntled (or potentially disgruntled) heirs?
• What is the trustee's capacity to handle financial and legal matters?

These are some of the most important questions on the need for the successor trustee to hire an attorney.  Basically, the more complicated matters are, the greater likelihood that the trustee should hire counsel to help them settle a trust.  One of the most important reasons is that the trustee has likely never done this before, and they do not know what they do not know. The trustee, importantly, is a fiduciary with a great deal of legal responsibility. The trustee's duties include, but are not limited to:

• Paying the decedent's creditors
• Paying/filing the decedent's last tax return
• Depositing the will with the probate court
• Filing a notice of trust with the local court
• Providing an accounting to all beneficiaries
• Acting as an impartial person, acting on in the trust's benefit
• Acting as a reasonably prudent person would in finalizing matters

In simple situations with a family that all gets along, settling a trust is not necessarily difficult for those who are capable of making sound financial decisions. If this is going to be too difficult for a family member or if the successor trustee is receiving lots of grief from other trust beneficiaries, it would be advisable to hire an attorney. The attorney would be paid from the trust estate, importantly, as this assists the successor trustee.

People who read this may also be interested in:

• Download your free book: Navigating the Florida Probate Process
• A Quick Guide to Revocable Living Trusts in Florida

 

When a loved one dies with a revocable living trust, we receive this question all the time.

During your loved one's lifetime, their living trust was most likely a "grantor" trust, meaning the trust operated under their own Social Security number. This made things simple and easy for your loved one. But upon the grantor's death, his or her Social Security number cannot be used to manage the trust. The successor Trustee of the trust will need to get an EIN/TIN from the IRS in order to claim the trust's assets and generally manage the trust. 

Once you receive an EIN from the IRS, the successor Trustee will be able to gather the trust's assets from the bank and other financial institutions. Without an EIN, the financial institutions will most likely not allow any movement of the assets. 

In settling the trust, the trust may need to file a tax return upon/before final distribution on all assets. A trust needs to file a tax return if it has more than $600 in income during a taxable year.  This means that simple trusts with outright distributions to beneficiaries will need an EIN, but may not need to file a tax return. Ultimately, we generally have our successor trustee clients work with a trusted CPA to confirm the tax issues.

If you are the successor trustee of a trust, you may need legal help to confirm your duties as trustee.  If so, we have helped trustees settle many trusts, helping make sure our clients follow their legal duties and do not make mistakes in the process.

People who read this question may also look to the following questions:

• Do I need an attorney to help settle a living trust?
• What should I do first upon a loved one's death?
• How long does the Florida probate process take?