ESTATE PLANNING PROCESS
We understand that estate planning can seem overwhelming, but it doesn’t need to be. These are important decisions you are making about your life savings and safeguarding your loved ones, and we are here to answer all your questions. Every family situation is different. To help you get the right plan in place, we will generally need to have at least two meetings with you.
Our firm doesn’t just create great estate plans; we also help our clients’ successors and families put the estate plan into action when the time comes. From our trust and probate litigation experience, we also have a very unique view of what will be required to make sure your estate plan will perform its intended purpose when the time comes, even if it is attacked. While no one can guarantee the outcome of any particular case, we have steps in place from your very first contact with us that are intended to protect YOUR wishes and make sure the instructions YOU provide in your estate plan will be followed and honored by your loved ones to give them the best chance of success.
Here is what you need to know about working with us:
Step 1 – First Contact
We strongly recommend that YOU, the person or married couple who owns the property that will be the subject matter of the estate plan, be the one/s to initiate the first contact with our office. For many reasons, we recommend that you not delegate this important step to anyone else. We understand that there are situations where a family member, employee, or friend lends a hand to help out, but we recommend that any help with transportation to your appointment, assistance with technology use, etc. happen only after YOU have chosen an attorney you are interested in working with and YOU initiate the first contact with that attorney. There are many reasons for this but the main concern is to protect your wishes in the event any disgruntled party chooses to attack your estate plan in the future.
Most people who don’t handle trust and estate litigation matters don’t realize that if someone is unhappy with the plans you have made for your property and you can no longer speak up about those wishes due to your death or incapacity, the attorney who helped YOU prepare your estate plan is a key witness. When the drafting attorney is asked who initiated the estate planning process, the answer should ideally be “the client contacted us to ask about doing XYZ.” If on the other hand the answer is “the client’s friend” or even that “the client’s child” initiated the process, the attacking party will always argue that the estate plan was that other person’s idea and that it was all done at THEIR instruction, not YOURS. The First Contact is very important because it establishes that the estate planning process with the attorney YOU chose, was initiated by YOU and no one else.
At the time of the first contact with YOU, our staff will set up a date and time for the first consultation meeting for which you should set aside 1 to 2 hours to go over your wishes and options. For married couples, this first consultation will need to be attended by both of you. After the first consultation meeting is scheduled with us by YOU, you can then delegate certain other people amongst your friends or family to help you with the other parts of the estate planning process. This is an important first step among others, to making sure your wishes will withstand a future challenge.
At this point in the process, our staff will not be able to quote fees for our services because we don’t yet know what kind of assistance you need from us. The flat fee for your estate plan can only be quoted by the attorney upon review of your situation and the type of planning you need at the First Consultation meeting.
Step 2 – The Client Questionnaire
We want to maximize your access to the information YOU need to meet YOUR goals. When you come to your First Consultation, we ask that you bring your completed Client Questionnaire, where you provide your general asset and family information to help us understand and analyze your current situation. The types and values of property you hold, the ages of your children, your marital status, and general information about your concerns will help us provide you with information that is directly relevant to your situation. All information you provide is confidential. We will send the Questionnaire to you by email or mail, or you can complete it in our office by arriving 20 minutes before your consultation time.
Step 3 – First Consultation Meeting – Approx. 1-2 hours
Our First Consultation meeting is a two part process and will generally take 1 to 2 hours. First, attorney Ernest Kim or Catherine Kim will review your goals and concerns with you and recommend the types of estate plans and trusts that would meet your needs. The attorney will also provide a general flat fee quote for the estate planning options that would best meet your goals. If you decide at that point that we are not the right fit for your needs, the meeting will end and no fees will be charged to you. Once you choose us and the type of estate plan that you would like to put in place, we will go into the design and specific terms and conditions you would like included in your plan, asking very detailed questions you have probably never been asked before. It is very important that you share any information that could be relevant to the needs of your family, your family’s future financial situation, and goals. This includes complete honesty about problems in your family including substance abuse issues, challenging relationships, and special needs anyone has. At the meeting, you will sign our flat fee retainer agreement if you decide we are the right firm for you, and 50% of the flat fee quoted will be due.
Step 4 – Estate Planning Binder and Document Preparation
We will prepare all of the documents that will become part of your estate plan. During this process, we will contact you for further information and follow up questions about your estate plan. On completion of the documents, we will contact you to set up your review and signing meeting with us. The documents are reviewed for quality control purposes throughout the process, and this document preparation stage can take 3-6 weeks.
Step 5 – Final Signing Meeting and Estate Planning Binder Review – Approximately 2 hours
At the final review and Signing meeting, we will go over your documents with you to confirm that they reflect your instructions and wishes, review the administrative steps and future management of your Trust by you as a Trustee, and you will sign your documents with our notary that day. We will provide you with the original documents in your Estate Planning documents in their protective binder, for your safekeeping.
Step 6 – Trust Asset Funding
Funding your assets into your Trust is an important step that must be completed to ensure that your estate plan will control them in case of your death or incapacity. At your signing meeting, we will provide you with the instructions and the needed documents for you to instruct your banks, real estate professionals, insurance agents and financial advisors on the proper titling of your assets. If you opt to have us help you with the real estate transfers into your Trust, we will conclude the recording of deeds with the County Recorder and provide you with these important Trust Transfer Deed documents to add to your Estate Planning binder for safekeeping once the County/ies have processed them. We encourage all of our clients to confer with their banks, financial advisors, realtors and insurance professionals to make sure your asset management partners are aware of, and can assist you with confirming that your assets are properly transferred into your Trust going forward. For most clients, the estate planning process is complete at this point and they will simply maintain the Trust going forward.
We recommend that all of our clients contact us for a periodic review of their plan every 4-6 years or when there are changes in their family situation or property profiles, to make sure their estate plan still meets the needs of their family in a changing landscape.
Step 7 – Liquidity Planning
No one intends to leave their families in financial turmoil. And yet in nearly three decades as probate and trust attorneys, the single most prevalent problem we see our clients encounter year after year is the lack of liquidity.
Simply put, liquid assets = cash available for expenses. When a parent/spouse/breadwinner in the family becomes incapacitated or dies, their income stream ends. Most families today rely on dual incomes generated by two parents, or on one parent who works outside the home, and one who works inside the home to keep the home running. Single parents leave their families even more exposed to the problems posed by lack of liquid assets. A family that had a parent who provided childcare at home but who can no longer do so, will need to find others to fill that gap, often at significant financial cost.
We have found that many families even in the most affluent areas of California – and even among families with “assets” in the seven figures – have not properly planned for the cash that is needed to replace income from the incapacity or death of a key family member. Expensive California homes and the family cars generally also have monthly mortgage and loan payments attached that don’t end until they are paid off. The equity in real property is often difficult to tap without selling the property, especially on a single income that makes qualifying for loans much harder. Many people have never thought about the fact that their family can either live in the house keeping the equity unusable, or that it must be sold to use some of the money, but that a new home and a new mortgage requiring payments will be needed.
Without a proper plan to replace lost income, mortgages, living expenses, and tuitions can’t be paid and assets must be sold. Real estate, stock accounts and retirement savings must be liquidated, whether the market conditions are good for selling at that time or not. The death or incapacity of a loved one that was already a traumatic event, is generally followed by more upheaval when the family learns they must move out, leaving behind friends and important connections, and that college, graduate school and other plans must be changed to fit the new financial reality of the entire family.
Estate planning to protect your family is not complete without also including liquidity and life insurance planning for income replacement, especially in areas with high costs of living like California. Here are some simple questions to consider:
- If I retired or stopped working today, could my family still take care of their mortgage, educational costs, medical, and other financial needs?
- If my spouse retired and stopped working today, could I on my own still take care of your family’s housing, educational, financial, medical, and caregiver needs?
- What is the monthly cash burn rate for my family’s needs, and what will it become when my children are in college/graduate school/private school? Do we have enough cash without my income to cover the monthly cash needs, and if so, where will that cash come from and how long will it last?
If you and your spouse are not in a financial position to stop working right now because you need to support your family, please talk to us or to your insurance advisors today to make a plan for your family’s income needs in the event that you can’t work.
Step 8 – Optional – For Further Reviews and Documentation
Some situations will require further reviews, more complex planning, or further documentation of your wishes. Many family situations lend themselves to disagreements and litigation over property, and if your situation has such “red flags,” there will be further recommendations made by the attorneys to help your successors defend your legacy from attack.
Business owners also need to consider business succession for someone to be able to take over the business, because many family businesses will simply fail and disappear without a viable succession plan in place.
Not every family will need these further steps however, so these further steps will be on a case-by case basis.
PROBATE OF WILL/ESTATE ADMINISTRATION PROCESS
We know that families who seek out information regarding probate, are coming to us after having experienced the loss of a loved one. The next steps can seem overwhelming. We are here to answer all your questions.
While there is no law with a hard deadline within which the probate process has to be started, the process should be started as soon as reasonably possible, and there are some important dates to keep track of including:
- If there is a Will left by the decedent, the person who has custody of that document should deliver it to the court clerk with a copy to the named executor or a beneficiary, within 30 days after having knowledge of the death of the testator. (California Probate Code Section 8200).
- If the estate is of sufficient size (around $4M+ for married couples, or around $11M for single person in 2023) that there may be estate tax returns to be filed or tax planning needed, a probate attorney and a CPA should be consulted well within 9 months from the date of death to determine any needed tax filings and estate tax planning.
- If there is real property in the estate, there are some filings to be done with the County’s Tax Assessor/Recorder’s office within 150 days of the date of death (BOE-502-D)
- If there is a family home that qualifies for the parent-child reassessment exclusion, a claim form should be filed as soon as possible to prevent reassessment of the property tax, but no later than three years after the date of death and before the property is sold to a third party. (BOE-58)
Whether or not there is a Will, the closest family member should contact a probate attorney to look into the process of safeguarding the assets of the Decedent while the probate process gets started. Even before anything is filed with the court, if there is property, that property immediately needs to be looked after, and the steps required will be dependent on the family situation and the types of assets left by the Decedent. If there is a business for example, then immediate action will probably be required to keep the business operational and to get access to business bank accounts so that payroll and taxes can be paid, inventory secured, etc.. The same goes for rental property, stocks, etc.. We have a very simplified checklist for interim steps to consider in a typical pre-probate situation, but remember that nothing can take the place of specific legal advice for your family’s particular situation.
A good rule of thumb is that when the death certificate becomes available, the first consultation should take place to discuss the assets that need to be looked into so that the need for probate, or the possibility of non-probate methods for transfer, can be investigated.
Here is what you need to know about working with us:
Step 1 – First Contact
We strongly recommend that whenever possible, the person named as Executor in the Will, or the Decedent’s nearest family member be the one/s to initiate the first contact with our office. This is important because different relatives may have different rights and a right to inherit is not necessarily the same as priority for appointment to be administrator.
For example, where there is a Will, the person named as Executor has priority to open probate. Where there is no Will, the nearest relative (the spouse of the Decedent if they were married; If unmarried, then the Decedent’s children, then parents, then siblings, etc.) has priority in that order, to open probate. A person with lower priority will generally not be appointed to serve, unless the person with higher priority gives up their right to be appointed.
At the time of the first contact with YOU, our staff will set up a date and time for the first consultation meeting for which you should set aside 1 to 2 hours to go over the property to be probated and the methods needed for each type of asset.
At this point in the process, our staff will not be able to quote exact fees for our services because we don’t yet know what kind of assets will be probated, or what other assistance will be needed from us. California has a statutory fee plan for probate of an estate where typical probate services are compensated to the Administrator/Executor, with an equal amount to their attorney on the following fee schedule, which is based on the gross value of the estate as appraised by the court’s probate appraisers:
(1) Four percent on the first one hundred thousand dollars ($100,000).
(2) Three percent on the next one hundred thousand dollars ($100,000).
(3) Two percent on the next eight hundred thousand dollars ($800,000).
(4) One percent on the next nine million dollars ($9,000,000).
(5) One-half of 1 percent on the next fifteen million dollars ($15,000,000).
(6) For all amounts above twenty-five million dollars ($25,000,000), a reasonable amount to be determined by the court. (California Probate Code Section 10810)
Under this fee schedule, a $500,000 estate for example will pay $13,000 in fees to the Executor/Administrator, and $13,000 in fees to their attorney. These fees will be paid by the estate, not by the Administrator personally, and are paid at the end of probate after a court order approving fees. Extra services that are not typically needed in an estate (for example if there is litigation or any other extraordinary tasks not usually required in a typical probate) are charged at hourly rates of attorneys and staff.
Step 2 – The Client Questionnaire
When you come to your First Consultation, we ask that you bring as much information as you have on our Client Questionnaire, where you provide any information available about the Decedent’s general asset and family situation to help us understand the situation so we can discuss the issues relating to the properties that need to be included in the probate process, and any special considerations for those properties. The types and values of property that need to be transferred, the family who will receive that property, and general information about your concerns will help us provide you with information that is directly relevant to your situation. All information you provide is confidential. You can click the link or we can send the Client Questionnaire to you by email or mail, or you can complete it in our office by arriving 20 minutes before your consultation time.
Step 3 – First Consultation Meeting – Approx. 1-2 hours
Our First Consultation meeting will generally take 1 to 2 hours and we will go over your questions, and an overview of the probate process to transfer a Decedent’s property to their successors.
Step 4 – Court Document Preparation
We will prepare all of the documents needed for the official court process, then set up a signing meeting to go over them together, sign and file them with the court.
Step 5 – Probate Court Hearings
We will serve all required notices and attend all court hearings on behalf of the Executor/Administrator so that they don’t have to go to court. Once the hearing confirming the court’s appointment of the Executor/Administrator concludes and the court issues documents confirming that the Executor/Administrator now has legal authority to act, we will go over the documents and provide detailed instructions needed for marshaling and protecting the assets of the estate.
Step 6 – Estate Asset Marshaling and Reporting to the Court
As the authorized party to act on behalf of the estate, the Executor/Administrator will be able to obtain financial information, collect accounts, and review all account information from financial institutions, and we provide complete instructions and the certified documents needed at each step. We will assist the Executor/Administrator in gathering all of the Decedent’s assets so they remain protected and that important decisions needed in order to safeguard the assets (sell the stock? close the business? rent the real property? collect rent?) are made with the assistance of financial professionals who can advise the Executor/Administrator on the best options. We assist in the necessary reporting of estate assets to the court in the Inventory and Appraisals, and coordinating valuations of property with the court appointed probate referee in charge of your case.
Step 7 – Estate Debts and Taxes
As the authorized party to act on behalf of the estate, the Executor/Administrator will be able to obtain the Decedent’s credit card statements, invoices, and tax information and forms so we can help them determine how to verify and clear the Decedent’s valid debts, deal with creditor claims, monitor relevant deadlines for creditors to appear, file tax returns with a CPA, etc.. We’ll assist with providing necessary notices to creditors and potential creditors as required by law, including the Department of Health Services and other entities. We can advise on which creditors to give priority to for payment. Once the debts and taxes are cleared and the time period for claims has run out, the Executor/Administrator can begin planning the distribution of the remaining assets to the beneficiaries/heirs.
Step 8 – Accounting & Distribution
We’ll have additional conferences to discuss the distribution plan throughout the administration. Sometimes assets need to be sold to effectuate the split amongst multiple parties. Sometimes the parties can agree to keep certain properties and distribute them “in kind. ” We’ll help the Executor/Administrator give an accounting, craft a distribution plan, and get it approved, including giving the required notices along the way to protect the Executor/Administrator from complaints later on from any disgruntled parties.
The accounting is needed so that the beneficiaries and the court understand that the estate assets were properly and prudently managed, and explains what assets came into the Executor/Administrator’s hands, how it was applied, who was paid and why, and what the new balance remaining for distribution is. The accounting and distribution plan will be submitted to the court for approval. Once approved, we’ll assist the Executor/Administrator in making the approved distributions to the parties, paying final administrative fees and costs including the court approved statutory and extraordinary fees (if any), and document that the distributions have been properly made by preparing and filing the needed receipts and other documents with the court to obtain a final discharge of the Executor/Administrator, at which time the court file is closed and the Executor/Administrator has no further duties.
Some helpful terms to know for a probate estate administration:
Decedent – the person who died owning property.
Estate – the property owned by a Decedent or incapacitated person, that no longer has an “owner” in charge due to the death or incapacity of the owner, that must now be passed on to the next successors in interest
Personal Representative / Executor / Administrator – the person the court puts in charge of the estate. Their functions are the same after they have been appointed but the official title is “Executor” if they have been nominated in a Will, and “Administrator” if there is no Will that named them. The Executor will follow the instructions in the Will, while the Administrator will follow the California laws regarding intestate (no Will) estates.
Probate – the court process by which an Estate is properly managed under court supervision, created by state law to provide an orderly process of protecting estate property and making sure it passes on to the appropriate parties.
Beneficiary/Heir – the person/s who will inherit the estate assets. If they are named in a Will to receive the assets, they are called beneficiaries. If there is no Will, they are called heirs.
Creditor’s Claim – A claim filed in the probate court against the estate, for money owed by the Decedent.
Fiduciary Duties – An Executor or Administrator is a fiduciary, which means that they are basically in a position of trust, taking care of other people’s (beneficiaries/heirs) money. There are many rules for fiduciaries which the court will require an Executor/Administrator to follow, to the point where a person seeking to be appointed by the court will be required to sign the “Duties and Liabilities of Personal Representative” court form confirming that they have received these rules, before they will even be considered for appointment.
Trust Administration Process
We know that families who seek out information regarding trust administration, are coming to us after having experienced the loss of a loved one. The next steps can seem overwhelming. We are here to answer all your questions.
If the Decedent created a Trust, the Trust (or a portion of it, if it was a married couple’s trust) is now irrevocable even if the name of the trust includes the word “Revocable.” This is because the trust was revocable during the lifetime of the Decedent who created it, but now that person who could have canceled or changed it, is no longer able to do so, which renders the Trust “irrevocable.” The Trust documents should be consulted to see who the next Trustee (the Successor Trustee) is to be, and the Trust administration process should be started by that Successor Trustee as soon as reasonably possible. There are some important deadlines and dates to keep track of including:
- If there is a Trust left by the decedent, the person who has custody of that document should safely deliver it to the named Successor Trustee (the next trustee named after the Decedent in the Trust document). ORIGINAL DOCUMENTS SHOULD ALWAYS BE CAREFULLY STORED IN A SAFE LOCATION, and anyone who needs to see the document should be provided with copies only, the originals should never be given to anyone until after a trust attorney has been consulted and retained.
- Within sixty (60) days of the death or incapacity of the Trust settlor, the Successor Trustee must serve a Notification by Trustee on all affected parties, in the format required by the probate code. This notification is also required to be given whenever there is a change in trustees.
- It is important to provide the Notification by Trustee promptly, as the date of serving it starts the 120-day clock running for any challenges to the documents to be brought up, and because the trust beneficiaries have the right to know who is managing the Trust assets and whether it is being managed properly.
- If the estate is of sufficient size (about $4M+ for married couples, or about $11M for single person in 2023) there may be estate tax returns to be filed or tax planning needed. A probate attorney and a CPA should be consulted to review the Trust and advise regarding tax matters, and this should be done as soon as possible so that preparations can be made to meet the 9 months from the date of death deadline for estate tax return filings and estate tax planning.
- If there is real property in the estate, there are some filings to be done with the County’s Tax Assessor/Recorder’s office within 150 days of the date of death. (BOE-502D)
- If there is a family home that qualifies for the parent-child reassessment exclusion, a claim form should be filed as soon as possible to prevent reassessment of the property tax, but no later than three years after the date of death and before the property is sold to a third party. (BOE-58)
Trust property immediately needs to be looked after, and the steps required will be dependent on the family situation and the types of assets in the Trust. If the Decedent left any assets that were not titled to the Trust, additional steps such as probate may be needed to bring those assets under the control and management of the Trustee. If there is a business, then immediate action will probably be required to keep the business operational and to get access to business bank accounts so that payroll and taxes can be paid, inventory secured, etc.. The same goes for rental property, stocks, etc.. We have a simplified checklist for interim steps to consider in a typical post-death situation, but remember that nothing can take the place of specific legal advice for your family’s particular situation.
A good rule of thumb is that when the death certificate becomes available, the first consultation should take place to discuss the assets that need to be looked into so that any urgent matters can be addressed and the Trustee can receive the information needed in order to meet their duties to manage the Trust assets properly.
Here is what you need to know about working with us:
Step 1 – First Contact
We strongly recommend that whenever possible, the person named as the next Successor Trustee be the one/s to initiate the first contact with our office. This is important because different relatives may have different rights, and the best interests of a beneficiary or potential beneficiary are different than those of the Trustee. As one important example, an attorney advising a beneficiary or potential beneficiary must put that beneficiary’s best interests first, even if it means advising them to consider challenging the validity of a Trust that leaves that person with less than they were promised; a Trustee on the other hand, must act to carry out the Trust’s explicit instructions, and must manage the assets in the best interests of all of the Trust beneficiaries equally, without favoring the interests of any particular beneficiary over the others. An orderly and cost efficient administration of the Trust without challenges or other litigation, is usually a Trustee’s main goal. In addition, only the Trustee has the authority to take action over Trust property, including hiring an attorney and paying attorney fees, administrative expenses, asset maintenance and other costs from the Trust.
At the time of the first contact with you the Successor Trustee, our staff will set up a date and time for the first consultation meeting for which you should set aside 1 to 2 hours to go over the trust terms and general information about the trust property to be administered.
At this point in the process, our staff will not be able to quote exact fees for our services because we don’t yet know what kind of Trust terms and instructions were left, what assets will need to be collected by the Trustee and protected, or what assistance will be needed from us. Trust administration services are provided at the hourly rates of attorneys and staff.
Step 2 – The Client Questionnaire
When you come to your First Consultation, we ask that you bring your completed Client Questionnaire and a copy of the Trust and pour over Will. We need to have as much information as is available about the Decedent’s general family situation and Trust assets, to help us provide you with information that is directly relevant to your situation. All information you provide is confidential. You can click the link above or we can send the Client Questionnaire to you by email or mail, or you can complete it in our office by arriving 20 minutes before your consultation time.
Step 3 – First Consultation Meeting – Approx. 1-2 hours
Our First Consultation meeting will generally take 1 to 2 hours and we will confirm the Trust’s successor Trustee, general instructions, and the Trust administration process and goals. At the meeting, the Successor Trustee will determine whether we are a good fit to work together and sign our retainer agreement, at which time a retainer deposit is due. Trust Administration services will be charged at our an hourly rates for attorneys and staff and can be paid from the Trust assets.
Step 4 – Trust Administration Document Preparation
Our office will prepare all of the documents needed for the Trust administration process to begin, including notices, affidavits, real property documents, and letters for financial institutions so that the Successor Trustee can take control over the Trust assets, and set a signing meeting for the Successor Trustee to execute them. We will go over the documents and provide detailed instructions needed for marshaling and protecting the Trust assets.
Step 5 – Marshaling Trust Assets
Once the documents evidencing the Successor Trustee’s authority are available, the Trustee will be able to obtain financial information, collect Trust accounts, and review all Trust account information from financial institutions, and we provide complete instructions and the certification documents needed at each step. We will assist the Trustee in gathering all of the assets so they remain protected, and assist the Trustee in obtaining the information needed so that important decisions can be made to safeguard the assets (sell the stock? close the business? rent the real property? collect rent?) with the assistance of financial professionals who can advise the Trustee on the best options. We assist with the necessary notifications to the beneficiaries to keep them informed of the Trustee’s decisions and proposed actions to lessen the possibility of beneficiary complaints.
Step 6 – Communications and Reports to Beneficiaries
An important aspect of the Trustee’s role is to communicate and keep the beneficiaries updated on the progress of the administration of the Trust. Depending on the complexities of the assets under managements and the relationships between the parties, some Trustees are comfortable sending frequent updates to their family members on their own by text or email so that the beneficiaries feel secure and comfortable in the knowledge that the Trustee is actively managing the tasks they need to complete, and that the beneficiaries can expect to be able to receive their distributions with minimal delays. Beneficiaries would generally also want to know about any significant transactions with trust property that are being contemplated, so they can weigh in on whether something should or should not be done, such as to sell and asset or distribute it in kind, etc.. We can assist with providing formal status reports so that there is a clear paper trail of the updates, status reports, and notices that were given regarding the Trustee’s management decisions and proposed actions, to lessen the likelihood of beneficiary complaints with the process.
Step 7 – Estate Debts and Taxes
As the court-authorized party to act on behalf of the Trust, the Trustee will need to manage and pay Trust debts. If there might be additional creditors, we can assist with the Trust notice process to publish notice and shorten the time for creditor’s to appear and make claims. The Trustee will work with tax advisors and make sure necessary returns are filed and taxes paid. Once the debts and taxes are cleared and the time period for claims has run out, the Executor/Administrator can plan for the accounting and distributions to the Trust beneficiaries.
Step 8 – Accounting & Distribution
We’ll have additional conferences with the Trustee to discuss the distribution plan throughout the administration. Sometimes assets need to be sold to effectuate the split amongst multiple parties. Sometimes the parties can agree to keep certain properties and distribute them “in kind. ” We’ll help the Trustee to give an accounting, craft a distribution plan, and get it approved, including giving the required notices along the way to protect the Trustee from any disgruntled parties. We will advise the Trustee on whether to keep any reserve in the Trust in case of audits or other events. The final accounting and distribution plan will be sent out to the beneficiaries for approval. We’ll assist the Trustee in obtaining Releases from further liability and in making the approved distributions to the parties, paying final administrative fees and costs, and documenting that this has been properly done by preparing and obtaining the needed receipts and other documents from the parties, and close the trust administration file.
Some helpful terms to know for a trust administration:
Decedent/Settlor – the person created and put property into the Trust.
Successor Trustee/Trustee – the person in charge of taking care of the Trust assets and carrying out the Trust’s instructions.
Beneficiary- the person/s who are named in the Trust to receive assets.
Fiduciary Duties – A Trustee of an irrevocable Trust is a fiduciary, which means that they are basically in a position of trust, taking care of other people’s (beneficiaries) money. There are many rules for fiduciaries which the law requires a Trustee to follow, including the duty to be loyal to the Trust beneficiaries, to act in the best interests of the Trust as a whole, to manage the trust assets competently and prudently (more carefully than managing their own assets), to keep the trust assets safe from loss, etc..