Trust Administration: Developing Good Organizational Skills and Providing Transparency

by | Sep 20, 2022 | Trust Administration, trusts

When it comes to estate planning, a trust provides creators with unique advantages and can help ensure that the creator’s final wishes are carried out how they see fit. While the formation of a trust, as well as overseeing a trust, might sound straightforward, it is actually a complex process and can become overwhelming. As the trustee, staying organized and providing transparency are key. 

What is a Trust Administration?

A trust administration is composed of all the tasks related to managing the assets, distributions, and filings of a trust. It is one aspect of estate planning. The trustee has various responsibilities that revolve around carrying out the provisions set forth by the trustor. In order to follow these provisions, the trustee may need to seek out legal and financial consultation. The trustee cannot act in their own self interest or in the interest of certain beneficiaries over the needs and interests of others. 

Trustors: When Creating a Trust

If you are in the process of or are considering creating a trust as part of your estate planning, there are a few considerations you should take into account. 

Be Specific 

If you are creating a trust, you will always want to be as specific as you can. Clearly documenting exactly what you want when it comes to your estate and assets will help your trustee and your beneficiaries avoid conflict when it comes to distribution. When you are in this process, you will also want to ensure that what you are requesting follows state and local law, as well as is realistic for your beneficiaries. 

Choose a Trustee Wisely

Take the time to really consider those who you would want to be your trustee and take into account how their individual interests might impact their ability to perform their duties. The person or people that you select to be your trustee should be trustworthy, honest, and detail-oriented. 

Know What Being a Trustee Entails

The trustee has a main overarching duty to handle the trust by reading and following the rules associated with it. All aspects of a trust should be reviewed, so that the trustee can become familiar with what provisions can be found inside and be aware of the distributions. This will allow the trustee to know when to appoint other people for certain tasks, as well as when to make discretions. 

Trustees are granted certain powers that only they have as the trustee when in relation to beneficiaries or other people listed in estate planning documents. This does not mean that a trustee has complete control over estate planning documents. While trustees will need to follow the provisions that are provided to them, they will also need to follow state and federal laws. However, a trustee also has the responsibility to act in the best interest of the trust.

There could be several estate planning documents involved in the overall estate plan, besides just the trust. Even if the trustee will not be interacting with these documents directly, they should still become familiar with them. Some of these other documents could utilize a portion of the trust or affect the trust in other ways. This includes the trustee verifying the validity of any wills signed by the creator of the trust. 

Provide Communication to Beneficiaries 

Beneficiaries and other people that are involved in the estate distribution process will want to know what is happening. Be transparent. Keeping them up to date on the current state of the trust, as well as what aspects have been looked over or what you need from them, can help to eliminate conflict. Set reasonable expectations for the beneficiaries by giving them realistic timelines for when issues may get resolved or when they can expect to start receiving their distributions. This could be in the form of an email, phone call, or a letter. However, if beneficiaries do still become confrontational, an estate planning attorney can help you mitigate these issues.

What Information Should Trustees Share?

One of the main duties of a trustee is keeping beneficiaries informed. In order for a trustee to remain transparent, they will want to ensure they are sharing important information with beneficiaries. This includes:

  • The amount and location of the assets of the trust. 
  • Any liabilities of the trust. 
  • Income that has been received by the trust. 
  • Actions that have been or will be taken by the trustee. 
  • Any person or organization that has been hired by the trustee. 

How Can a Trustee Stay Organized? 

The trustee will need to not be very detail-oriented, but also well-organized. The trustee will have many different types of documents to keep track of, so these should all be kept in the same place and a place that keeps them safe. This might be a binder or a folder. Keep in mind that the trustee might need to have copies of the trust, death certificate, and room in this space for insurance policies and real estate documents. However, the trustee could also benefit from an electronic means of organization. This might include documenting assets by utilizing a spreadsheet, such as an Excel form. 

While record keeping can be a tedious task, it is an essential part of the process to ensure that the distribution of assets and wishes is done so successfully. Keeping track of all of the information surrounding the trust will allow the trustee to track information, transactions, and have information at the ready if it is requested by a beneficiary. 

Hire a Professional Estate Planning Attorney 

Estate planning, as well as remaining organized when it comes to the trust administration process, can be complex and confusing. Due to the necessary responsibilities involved, many individuals seek out legal consult to mitigate issues and ensure they are acting within state and federal laws. At Galanti & Copenhaver, we provide an individualized experience for each of our clients. We work with you to understand the ins and outs of the trust provided. 

Call today to schedule an initial consultation with a member of our experienced team. We are ready to help you with all your estate planning needs.