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Ask the Attorney: Do I Need a Lawyer to Help Administer a Trust?

Trusts can be particularly taxing and confusing to administer. Fortunately, you don’t have to take on this daunting responsibility alone. If you’ve recently been appointed as a trustee, an estate planning attorney can help guide you on your trust administration journey to ensure that you fulfill your duties successfully.

What is a trust?

A trust is a legal document that establishes a fiduciary relationship between a trustee and one or more beneficiaries.

The trustee holds and maintains the property and assets in the trust for the future benefit of the beneficiaries. The distribution of these assets is dictated by the terms of the trust, as established by the trustor, or the person who sets up the trust.

There are several types of trusts, including revocable, living, and spendthrift trusts. The appropriate type will vary depending on the trustor and/or beneficiaries’ needs. A trustor can have one or more active trusts at a time.

Trusts are an essential part of a comprehensive estate plan. Not only do they help provide for the future, but they can also help the parties avoid probate, the court-supervised process that’s often necessary after a person’s passing to distribute property, pay debts, and close out their estate. 

What does it mean to administer a trust, and who makes that decision?

When someone is tasked with administering a trust, it means they’re responsible for completing certain tasks, including:

  • Following the terms of the trust
  • Managing trust assets
  • Distributing assets based on certain terms
  • Resolving conflicts among beneficiaries
  • Maintaining detailed records
  • Paying taxes on the trust

Trust administration is left to the trustee, who is chosen by the trustor when they establish the trust. A trustee can be an individual, but it could also be a lawyer, bank, or other financial institution.

For living trusts, a trustor can be their own trustee, meaning they administer the trust themselves. When trustors act as trustees, they should name a successor to take over the job once they become incapacitated or pass away. 

Administering a trust can present many challenges, which can vary depending on the type of trust and the assets in it. For this reason, it’s important for trustors to take care when deciding who to appoint as trustee and consider whether this party is willing and able to take on the job.

Is legal assistance required for trust administration?

Trustees aren’t required to seek legal guidance to administer a trust. Even so, it could be beneficial to get assistance from an estate planning attorney.

Even the smartest, most capable individuals can have difficulty administering a trust. When someone lacks legal and financial knowledge or experience, the tasks associated with trust administration can seem much more daunting and baffling. 

Trustees must understand what’s expected of them and the terms of the trust. A person could have the best of intentions and still fail to properly administer a trust if they lack the right tools and resources. In the worst-case scenario, an inexperienced trustee could make critical mistakes and be held personally liable for their errors.

As a newly appointed trustee, working with an estate planning attorney is the best way to ease your stress. A lawyer can provide much-needed guidance and ensure that the trust thrives with you at the helm.

Address Your Trust Administration Needs With an Experienced Estate Planning Attorney

Estate planning lawyers can help with any and all tasks related to trust administration, and the experienced team at OC Wills & Trusts wants to help you. If you live in Orange County, CA, or the surrounding area, contact our firm and schedule a consultation to learn more.

Brian Chew, the managing partner of OC Wills & Trust Attorneys, has extensive experience in the areas of estate planning, asset protection planning, business succession planning, long-term care planning, and veterans’ benefits. By devoting his practice to estate planning matters, he has founded a firm that strives to provide exceptional service to their clients by working closely with individuals and their families to create comprehensive and customized estate plans. For the past twenty five years, Brian has served thousands of clients in the matters of estate planning, wills and trusts. If you have any questions about this article, you can reach Brian Chew here.