Assume your widowed mother’s living trust directs distribution of her assets at her death equally among her children and that she selected you as Trustee to make sure her wishes are followed. Now that she has passed away, you need only to transfer the trust’s assets equally to yourself and your siblings, right? Wrong! As Trustee you have numerous obligations which, if not performed, could expose you to liability. Please consider the following:
Read all of Mom’s documents carefully.
Mom’s Will may have made specific bequests of certain tangible personal property to named individuals, or her trust may create a “continuing trust” for the share of a disabled sibling. Keep all beneficiaries fully informed. You must provide your siblings with a copy of the trust document and keep them informed of financial information related to the trust’s assets, expenses, debts, and taxes.
File necessary documents in the appropriate court with jurisdiction.
Although trust administration is more private than probate administration, a few court procedures are required to satisfy obligations to known and unknown creditors.
Inventory Mom’s assets.
Consult a financial advisor to determine whether any of the investments are no longer appropriate and whether the trust portfolio is properly diversified during your administration before distribution. Real estate and personal property appraisals may be required using certified appraisers.
Collect all of Mom’s bills.
Have Mom’s mail forwarded to you and check all potential sources of debt, medical bills, credit cards, utilities, insurance, magazine subscriptions, etc. If you do not pay the balance of her debts not covered by insurance before making distribution, you could be personally liable for those obligations.
Complete tax return filing responsibilities.
As Trustee, you may need a qualified tax consultant to assist you in filing Mom’s last income tax return and file trust income tax returns. A Federal estate tax return might also be required. If returns are not filed properly, you could be personally responsible for an taxes owed.
Consult your attorney about your responsibilities under Florida law.
Florida has adopted a new Trust Procedure Act that addresses trust administration matters in more detail. This article highlights only a few responsibilities of the Trustee. If you have specific questions, please call any lawyer in our estate planning group. We will be happy to assist you.