Sacramento Trust Administration Attorneys
We pride ourselves on providing everyone with an affordable, yet extremely high quality and thorough estate planning option. Our law firm believes in being there for you and your family for the long run. What this means is that we do not merely prepare trusts, we also administer them and help families and children with post-mortem trust administration and the winding up of estates. This is truly the signature of a dedicated estate planning law firm, as unfortunately too many estate planning law firms do not also practice trust administration. We also do not practice trust mill techniques, pumping out thousands of trusts in a year, we make sure all of our clients get the best attention and care possible and to accomplish this we are selective about whom we take as clients. We firmly believe in quality…not quantity.
Clients who used our firm to prepare their estate planning documents will receive a discount off of our normal trust administration fees when they time comes for their trust to be administered. Our current trust administration fees depend on the complexity of the estate, the number of assets to be administered, the status of the beneficiaries and whether the estate is taxable.
Living Trust Distributions
Trusts are designed to distinguish between income and principal, as many of them, especially older trusts, provide for income to be distributed to one person at one time and principal to either that same person at a different time or to another person entirely. For example, many trusts for a surviving spouse provide that all income must be paid to that spouse, but only pay the spouse principal in limited circumstances, such as a medical emergency. At the spouse’s death, the remaining principal may be paid to the decedent’s children, to charity, or to other beneficiaries. Income payments and principal distributions can be made by check, or at the trustee’s discretion by distributing securities as well as cash.
Unless a fiduciary has experience in this area, it is recommended that he or she seek professional advice regarding the investment of trust assets. In addition to good investment results, the fiduciary should invest within the applicable Prudent Investor Rule that governs the trust or estate. A skilled investment advisor can help the fiduciary decide how to invest, what assets to sell to provide cash for expenses, taxes, or outright distributions, and how to minimize income and capital gains taxes.
During the period of administration, the fiduciary must provide an annual income tax statement (called a Schedule K-1) to each beneficiary who is taxable on any income earned by the trust. The fiduciary can be held personally liable for interest and penalties if the income tax return is not filed and the tax paid by the due date, generally April 15.
Closing the Estate
Estates close when the executor has paid all debts, expenses, and taxes; received tax clearances from the IRS and the state; and all assets on hand have been distributed. Trusts terminate when a date or event described in the document occurs, such as the death of a beneficiary or the date the beneficiary attains a stated age. Some states require a petition to be filed in court before the assets are distributed and an estate or trust can be closed. When such a formal proceeding is not required, it is nevertheless good practice to require all beneficiaries to sign a document, prepared by an attorney, in which they approve of your actions as fiduciary and acknowledge receipt of assets due them. This protects the fiduciary from later claims by a beneficiary. A final income tax return must be filed and a reserve kept back for any tax that may be due.
Common Questions
How do I title accounts?
Each bank or investment firm may have its own format, but generally you may use, for a trust, “John Smith, Trustee, John Smith Trust dated January 28, 2008,” or, in a shorthand version, “John Smith, Trustee under agreement dated January 28, 2008.” For an estate, “John Smith, Executor, Estate of John Smith, Deceased.”
How do I sign my name in a fiduciary capacity?
An executor signs: “John Smith, Executor (or Personal Representative) of the Estate of John Smith, Deceased”. A trustee signs: “John Smith, Trustee”.
Where do I hold the estate or trust assets?
If you engage a trust company, they will open an account in the name of the estate or trust and provide regular statements showing all income and disbursements. You can open an investment account with a bank or brokerage company in the name of the estate or trust. All expenses and disbursements must be made from these accounts, and you should receive regular statements.
How (and how much) do I get paid?
Fiduciary work is time-consuming and can be difficult; it is appropriate to seek payment for your services. The will or trust agreement may set forth the compensation. If they do not, many states provide either a fixed schedule to which you must adhere, or allow “reasonable” compensation, which usually takes into account the size of the estate, the complexity involved, and the time spent by the fiduciary. Executor’s or trustee’s fees are taxable compensation to you. As stated above, several states do not permit the fiduciary to pay his or her own compensation without a court order; check with your attorney before you write yourself a check.
What if a beneficiary complains?
Even professional fiduciaries, such as trust companies, receive complaints from time to time. The best way to deal with them is to do your best to avoid them in the first place by following these guidelines and consulting with an attorney experienced in estate administration. Many complaints arise because beneficiaries are not kept up to date on the administration of the trust or estate. Frequent communication with beneficiaries is a must. Whenever possible, consult with an attorney who specializes in trust and estate matters when a complaint involves more than routine issues.
Can I be sued or be held personally liable?
Your errors or mismanagement of a trust and estate can indeed subject you to personal liability. Common pitfalls include not paying tax or filing returns on time, improper investment choices (whether too conservative, too speculative, or favoring one beneficiary over another), self-dealing (buying assets for yourself or your family from the estate or trust, whether or not at market price), or allowing property or casualty insurance to lapse, resulting in a loss to the account. Your best protection is to get good professional advice and to fully document your actions and decisions.
How am I discharged as fiduciary at the end of the administration?What if I want to resign?
Whether you stop acting because the estate or trust has terminated, or you wish to resign before the conclusion of your administration, you must be discharged, either by the local court or by the beneficiaries. In some states, this is a formal process, involving the preparation of an accounting. In others, a relatively simple document signed by the beneficiaries can be used. If you are resigning prior to the conclusion of your administration, check the document to see who succeeds you as fiduciary. If no successor is named, you may need a court proceeding to appoint a successor before you can be discharged.
Contact Experienced Sacramento Trust Administration Attorneys
We are experienced Sacramento Trust Administration Attorneys. We have helped hundreds of individuals and families plan for the inevitable through estate planning techniques including the preparation of revocable and irrevocable living trusts, spendthrift trusts, special needs trusts, wills, powers of attorney for medical and business, living wills, medical directives, and guardianship provisions for minor children.
We are also experienced Sacramento probate and Sacramento estate planning attorneys and understand the difficulties of settling estates once your loved one has passed. Our estate planning attorneys are experienced and caring and will walk you through how to make and express some of the difficult decisions you need to make. You will have a great sense of relief and satisfaction once your estate planning documents have been finalized. Our Sacramento trust administration attorneys can guide you with great legal advice and the strategy needed to get you the results you want. Contact us today to schedule your complimentary attorney consultation by clicking HERE or by calling 916-757-6000. We look forward to helping you with all of your Sacramento trust administration needs.
