why is a lawyer necessary in the trust administration process

Full Answer

What does a trust lawyer do?

After acquiring the pertinent information needed, a trust lawyer mainly works on four documents—last will and testament, living will and advance directives, power of attorney and various other trusts.

How to execute a trust?

As to the execution of trust, it is upon the wisdom of the trust lawyer to determine the type of trust you have to execute that is suitable to your own needs. The trust document to be executed will specify the rules to which the trustee shall abide. Choosing the proper trust is thus very important.

What are the advantages of a trust?

Another reason why setting up a trust arrangement is seen as advantageous is the fact that it lowers the estate taxes that your estate would need to pay before the properties can be distributed to the heirs.

When is a lawyer needed for a living will?

A trust lawyer is also needed in the preparation of a living will, a document that specifies the client’s intentions pertaining to the medical procedures and care they intend to receive in times of incapacity. The expertise of the trust lawyer is called for in the making of living will since its legal requirements vary from state to state.

What are administrative provisions of a trust?

Administrative Provisions: Provisions of a trust that govern the powers of the Trustee, payment of taxes and expenses, rules for interpreting the trust instrument, and other procedural issues. The bulk of the Trust is made up of these administrative provisions.

Who prepares the trust?

The person who creates the trust is called the "settlor." The trustee, the person in charge of managing the trust (again, this is your name if it's your trust). The trustee who will take over managing the trust and distributing the property when the original trustee dies or becomes incapacitated.

What are the three roles of a trustee?

1) Duty to Administer Trust Governed by Instrument (Section 16000). 2) Duty of Loyalty to Beneficiaries (Section 16002). 3) Duty to Deal Impartially with Beneficiaries (Section 16003).

What are the roles in a trust?

For example, each trust has three main roles in it: trustor, trustee and beneficiary.

Who owns the property in a trust?

In simple trusts, the trustee is legal owner and simply holds as little more than a nominee for the beneficial owner. The beneficial owner may be in occupation of the property and has its full benefit.

Can a trustee also be a beneficiary?

Both the settlor and/or beneficiary can be a trustee, however if a beneficiary is a trustee it could lead to a conflict of interest – especially when trustees have the power to decide by how much each beneficiary can benefit.

What are duties and powers of a trustee?

Your duties as a trusteeDuty of care. As a trustee you must take reasonable care when carrying out your role. ... Avoid conflicts of interest. ... Act impartially between beneficiaries. ... Comply with the terms of the trust. ... Take control of the trust assets. ... Keep accounts. ... Prepare tax returns. ... Take professional advice.More items...•

What are the legal obligations of a trustee?

The trustee acts as the legal owner of trust assets, and is responsible for handling any of the assets held in trust, tax filings for the trust, and distributing the assets according to the terms of the trust. Both roles involve duties that are legally required.

How is a trustee held accountable?

Trustees must follow the terms of the trust and are accountable to the beneficiaries for their actions. They may be held personally liable if they: Are found to be self-dealing, or using trust assets for their own benefit. Cause damage to a third party to the same extent as if the property was their own.

Who is usually the trustee of an irrevocable trust?

Often the grantor will choose his spouse, sibling, child, or friend to serve as trustee. Any of these may be an acceptable choice from a legal perspective, but may be a poor choice for other reasons.

Can a trustee do whatever they want?

The trustee cannot do whatever they want. They must follow the trust document, and follow the California Probate Code. More than that, Trustees don't get the benefits of the Trust. The Trust assets will pass to the Trust beneficiaries eventually.

Who appoints a trustee?

A trustee is appointed by virtue of the trust deed after which the Master merely authorizes the trustee to act as trustee in terms of theTrust Property Control Act.

Why is it important to choose a trustee?

The trustee serves a crucial role in trust administration. For that reason, choosing the right trustee is extremely important. The way a trust operates, the trustee will be given authority over your financial affairs and personal matters, under the terms of the trust. Therefore, you should choose a trustee who you believe is trustworthy, ...

What is the role of a trustee in a trust?

The trustee serves a crucial role in trust administration. For that reason, choosing the right trustee is extremely important. The way a trust operates, the trustee will be given authority over your financial affairs and personal matters, under the terms of the trust.

How to contact Schomer Law Group?

If you have questions regarding estate planning, trust contests, or any other trust administration issues, please contact the Schomer Law Group either online or by calling us in Los Angeles at (310) 337-7696, and in Orange County at (562) 346-3209. #estateplanning, #schomerlawgroup, #trustadministration. Author.

What is the job of a trust attorney?

The trust attorney’s tasks also include drafting documents intended for the protection of the assets against lawsuits and taxes. The first thing that a trust lawyer must do at the start of the engagement is to make a plan based on the needs of the client.

What documents do trust lawyers work on?

After acquiring the pertinent information needed, a trust lawyer mainly works on four documents—last will and testament, living will and advance directives, power of attorney and various other trusts.

What is a trust plan?

The plan is based on the economic and financial circumstances of the client as assessed by the trust lawyer her or himself. The trust lawyer must also evaluate whether the client is married or not, the number of children, as well as incapacity issues that may be relevant as to the terms and conditions of the trust.

What is a trust in estate planning?

Setting up a trust has been a popular estate planning tool, especially if you want to leave properties and assets to your loved ones without the hassle of undergoing the probate process. In a trust, the creator or trustor transfers his property under the care of a trustee, who can be a trust lawyer, in favor of the beneficiary.

What is a requisite condition before a power of attorney is deemed effective?

A requisite condition before the power of attorney is deemed effective is the judicial declaration of a person’s incapacity. It is therefore incumbent upon the trust lawyer to secure this requisite before the power of attorney can be permitted.

Why is choosing a trust important?

There must be some strike of balance between the objectives of the client and the various statutory provisions governing the many variations of trust. It can become more complex, however, if the trust lawyer is expected to deal with a large estate.

Who is needed to set up a trust?

To assist you in setting up a trust, a trust lawyer is needed who can provide meaningful legal help to the trustee, the person who is in charge managing the trust. As mentioned above, you can even name a lawyer as the trustee, which can be helpful in cases where the estate is large and complex.

What is a Trust?

A trust is established to provide protection for the decedent’s assets, to ensure those assets are distributed in accordance with the decedent’s wishes, and to save time and money by avoiding the probate court process. Physically, a trust is a document outlining all of these elements which a person signs in order for it to become effective.

What is Trust Administration?

Trust administration is the process by which a decedent’s estate is settled when they die (if the decedent created a trust during life). Trust administration requires time, attention, and knowledge of the process in order to be done correctly and in a timely manner with the court.

General Trust Administration Steps

Trust administration is an important role which the trustee (s) must undertake to settle a decedent’s estate. Below are the general steps involved in completing the process. Trust administration involves legally required actions which are important to note.

Can I Administer a Trust Without an Attorney?

Although legal counsel is not required for the trustee to administer a trust, it is not advisable to undertake this take for the first time alone. Trust administration requires many steps that must be meticulously followed to ensure legal compliance. These steps can become confusing depending on the complexity of the estate.

What are the Costs Associated with Trust Administration?

Like most elements of trust administration, the costs and fees resulting from the process will also vary depending on the complexity of the estate and duration of administration.

What is the job of a trustee?

The overall job of a Trustee, however, is to manage the trust assets and to administer the trust using the terms created by the Settler. Among the most common specific duties and responsibilities of a Trustee are the following: Protecting the trust assets. A Trustee is responsible for managing and protecting all assets held by the trust.

Who is accountable for the success of a trust?

Ultimately, the Trustee is accountable for the success, or failure, of the trust. Keeping detailed records of everything involved in administering the trust is crucial in case the decisions you made are ever questioned. Preparing and paying trust taxes.

What is a trustee in a trust?

A Trustee is responsible for managing and protecting all assets held by the trust. This could include anything from reconciling bank statements to maintaining real property. Understanding the trust terms.

How many beneficiaries can a trust have?

A trust must have at least one beneficiary but may have an unlimited number of beneficiaries. A trust may have both current and future beneficiaries. If the trust is a testamentary trust, it means the trust will not activate until the Trustor’s death.

What is a trust fundamental?

A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Trustor, also called a Settlor or a Grantor, who transfers property to a Trustee.

What happens if you make a mistake in a trust?

Mistakes made during the administration of a trust are frequently the result of a Trustee’s failure to understand what is expected of him or her and/or failing to have a clear understanding of the trust terms. Moreover, you could be held personally liable for mistakes made during the administration of the trust.

What can an independent mediator do?

An independent mediator can be engaged if necessary. Distributing trust funds to beneficiaries. The trust terms dictate how and when to distribute the trust assets; however, you may also have the discretion to make additional distributions which gives you a considerable amount of power. Keeping detailed trust records.

Why is it important for a trustee to be represented by a trust administrator?

It is advisable for the trustee to be represented by a trust administrator because of the complexities associated with the trust administration process and because of the potential for legal liability that is associated with failures during the process of administering a trust.

What happens when you create a trust?

When you are creating a trust, you need to make smart choices regarding who you select to serve as your trustee as this person will be in charge of trust administration. Trust administration, unlike probate, does not occur in court so there is no direct judicial oversight of the trust administration process. If there are problems, beneficiaries would have to initiate legal action and pursue a claim against the trustee, which can be costly and complicated for those who stand to benefit from the trust.