In August, the Trust and Estate Lawyers of Clarity Legal Group® held our first Fiduciary School for individuals named as future Trustees, Executors, and Agents under General or Health Care Powers of Attorney. I had long want to address this important gap in the efficient administration of our client’s affairs by beginning to prepare these people who play a critical role in the effective management of client affairs. This class was just a beginning, but I think we did effectively define a context for this work, and help the future Trustees better understand their powers and duties in these roles. Of course, one of the messages we had at this class was that as trust and estate administration attorneys, we will be there to guide you through the process and help with parts of the work. A trust administrator has a tremendous amount of responsibility after the death of a trust creator. It will be up this Successor Trustee to manage trust assets and provide support for the trust creator as beneficiary should they become incapacitated and to facilitate the accurate and efficient transfer of assets held in trust after death. If you have been named to this role as Successor Trustee, you need to be certain you are ready to take on these responsibility.
At Clarity Legal Group®, we offer comprehensive assistance with the trust administration process, as well as with trust creation. We help those who are creating a trust to select the right person to serve as trustee and trust administrator by providing detailed advice on what role the trust administrator will have to play. My advice for selecting a Trustee or other individual fiduciary always begins with this: you don’t have to pick someone with experience or expertise as a Trustee, you have to pick someone who is responsible. A Trustee can always seek professional guidance or even hire others to perform key services. However, they are always they person responsible for ensuring that things get done and get done correctly.
If you have set up an estate plan, the professionals at Clarity Legal Group® would be happy to meet with your future Executors or Trustees to talk about their responsibilities and powers to prepare them for this vital role. .
What You Need to Know Before You Agree to be a Trust Administrator
If you agree to take on the responsibility of serving as a trust administrator, you need to understand a few key things.
First and foremost, the trust administration process typically takes place outside of court, unless there is a problem. That means you are going to be responsible for understanding what steps you need to take to administer the trust and for fulfilling all legal requirements.
You’ll have to do things like providing notice to interested parties, determining the order of payment of creditors, retitling financial accounts, establishing a new tax identification number for the trust, and addressing any tax issues that arise as a result of the transfer of trust assets. All of this can be complicated and can require technical legal and financial knowledge. You can and should experienced trust administration lawyers to help you fulfill your obligations and administer the trust efficiently and effectively. Ultimately you are the one who will have to take responsibility for making sure the trust administration process is completed properly.
You will also be responsible for managing the trust assets during the trust administration process as well as keeping appropriate records about your activities.
Finally, it is important to be aware that you will have a fiduciary duty as a trust administrator. A fiduciary duty is the highest duty that one person can owe. You cannot act negligently and cannot act in your own best interests over the interests of the trust creator and trust beneficiaries when you have a fiduciary duty. You must faithfully follow the instructions in the trust and cannot do anything to enrich yourself at the expense of the trust (other than to take the reasonable compensation defined in the Trust Agreement).
If you are accused of breaching a fiduciary duty, there could be serious legal consequences for you. You could be sued for breach of fiduciary duty and could be held responsible for financial loss that your actions caused. This means you take on the risk of a personal legal battle and personal liability if you become a trust administrator.
Getting Help from a Raleigh, Durham, Chapel Hill area Trust Administration Lawyer
The lawyers at Clarity Legal Group® consider trust administration one or our core practice areas. Our lawyers can provide you with assistance in establishing a trust and then provide your future Trustees with assistance in administering it. If you think you may want a trust to protect your family but you aren’t sure about what type of trust is right for you or who you should name as trust administrator, you can give us a call and we’ll help you with the trust creation process.
We can also help you if a trust creator has passed away and you’re in a position of having to provide notice to interested parties, having to manage assets, and having to facilitate the transfer of the wealth held in trust. To find out more about all of the ways our legal team can help you with issues related to trusts, give us a call at 919-484-0012 or contact us online today.
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