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Encino Trust Administration Attorneys

Safeguarding Effective Trust Administration

Trust administration is one of the most overlooked parts of estate planning. Failure to properly administer a trust can result in unnecessary taxes, very large attorney fees, and lawsuits by beneficiaries against trustees. At Tisser & Standing LLP, we have the experience and comprehensive knowledge of state and federal laws to help administer your trust effectively. Our Encino trust administration lawyers work closely with clients like yourself throughout the entire process to ensure that your trust won’t cause any issues for your beneficiaries in the future.

If you are named to serve as Trustee of someone’s trust, get in touch with our firm today at (818) 528-5553.

What Is Trust Administration?

Trust administration refers to the process of a trustee’s management and distribution of a trust property to beneficiaries at the time of the grantor’s death. During this time, there are many matters that must be addressed, some of which depend on the kind of trust that is being administered.

Some of these matters include:

  • Having the successor trustee take control of the trust and its assets.
  • Notifying the trust’s beneficiaries and the decedent’s heirs that they are entitled to a copy of the trust.
  • Identifying and collecting the trust assets.
  • Identifying what debts the decedent owed.
  • Paying the decedent’s income taxes.
  • Determining whether an estate tax return will need to be filed and whether estate taxes will be owed.
  • Determining what tax planning might need to be done, such as avoiding property tax increases on real estate, the making of disclaimers and allocating generation-skipping tax exemption to trusts created as a result of the decedent’s death.
  • Creating trusts for beneficiaries.
  • Determining what assets are to be allocated to the beneficiaries.
  • Distributing the assets to the beneficiaries.

Trustee Responsibilities

Every trust has a trustee who is responsible for properly carrying out his duties. These duties are called “fiduciary” duties, which means the trustee must exercise the highest standard of care in carrying out his or her responsibilities under the terms of the trust. Failure to meet this standard could result in the trustee being sued by the beneficiaries for breach of the trustee’s duties.

The trustee’s duties are derived from three sources: the trust document, the California Probate Code, and case law. The trustee’s actions must be in compliance with all of these.

The duties discussed in this section apply to all trustees of all trusts, including the trustee of the Administrative Trust during its trust administration and the trustee of any trusts created for beneficiaries after distribution of the assets.

Some of the trustee’s responsibilities include:

  • Managing the trust assets and distributing income and principal to beneficiaries
  • Making sure that the trust assets are separate from other individual’s or the trustee’s personal assets
  • Not using the asset for the trustee’s own benefit
  • Treating all beneficiaries equally and without bias
  • Making sure the trust assets are preserved. If invested, it should be in a conservative manner wherein there is reasonable growth with minimum risk
  • Proper bookkeeping, or making sure all trust activities are accurately recorded, and providing those reports to the beneficiaries at least annually
  • Filing tax returns
  • Reporting to the beneficiaries significant activities of the trust as the term requires

If you have been appointed as someone’s Trustee, our Encino trust lawyers can answer all your questions and guide you through the process of administering the trust. Call Tisser & Standing now at (818) 528-5553.

Making Sure Annual Accountings Are Prepared Properly

California law requires that a trustee keep each beneficiary of the trust reasonably informed of the trust and its administration. The trustee must account annually to any beneficiary who is currently entitled to income or principal.

The Annual Trust Accounting is a document that must be presented in a certain format under California law in order to protect the trustee and start the period during which a beneficiary might file an action against the trustee for improper trust administration.

A trust accounting is prepared in a different format from a financial statement of the type prepared by an accountant. Therefore, if the trustee has an accountant prepare the trust accounting annually, the trust attorney should review it. Although preparing formal accountings will add to the expense of administration, the cost is payable from the trust, is tax deductible, and will be spread among all the beneficiaries.

At Tisser & Standing, we help trustees manage trusts properly by guiding them through every aspect of the trust administration. Call now for a consultation.

Important Information Included in a Trust Accounting Statement

Under California law, even those beneficiaries who are not currently entitled to income or principal may have a right to demand an accounting by the trustee. While the trustee may not currently expect that such a demand will ever be made by the remainder beneficiaries, the trustee cannot be certain that circumstances will not change.

In California, the annual accounting is to be prepared for the trust’s tax year which just ended and must include the following information:

  • Receipts and disbursement statements of the principal and income during the last year
  • Assets and liabilities statement of the trust
  • The trustee’s compensation
  • Any professionals or agents hired by the trustee, which should include the agent’s relationship to the trustee including their compensation
  • A document stating the right of the recipient of the accounting to file a petition in court to obtain a court review of the account and acts of the trustee
  • A document stating the terms of filing claims against the trustee for breach of trust

Give our Encino trusts attorneys from Tisser & Standing a call at (818) 528-5553 to receive the legal guidance that you need to properly manage a trust.

Planning with a Purpose

How Tisser & Standing LLP Fits the Bill
  • Certified
    Specialists

    We are Certified by the State Bar of California Board of Legal Specialization.

  • Top-Rated Lawyers
    in Our Field

    Our team has been recognized as Super Lawyers and America's Top 100 Attorneys.

  • Nearly 50 Years of
    Combined Experience

    Advice you can depend on,
    every time.

  • Stress-Free
    Process

    Guiding you through every step of the estate planning and trust administration process.