Individual trustees

What is an individual trustee? Who is the trustee of a trust? How many trustees can be appointed as trustees? Does the will give everything outright, or does it create new trusts that may continue for several years? The document often imparts important directions to the fiduciary, such as which assets should be used to pay taxes and expenses.

Individual trustees

Most fiduciaries retain an attorney who specializes in the area of trusts and estates to assist them in performing their duties properly. See full list on americanbar. Some assets, such as brokerage accounts, may be accessed immediately once certain prerequisites are met. Typical prerequisites are an executor obtaining formal authorization, sometimes referred to as Letters Testamentary, from the court and producing a death certificate. Other assets, such as insurance, may have to be applied for by filing a claim.

Depending on the nature and value of the property, this may be a routine activity, but you may need the services of a specialist appraiser if, for example, the decedent had rare or unusual items or was a serious c. In some cases the estate may be harmed if certain bills, such as property or casualty insurance bills or real estate taxes, are not paid promptly. Most states require a written notice to any known or reasonably ascertainable creditors. While most bills will present no problem, it is wise to consult an attorney in unusual circumstances, as the fiduciary can be held personally liable for improperly spending estate or trust assets or for failing to protect the estate assets properly, such as by maintaining adequate insurance coverage. The fiduciary may be responsible for filing a number of tax returns. Wills and trusts often provide for specific gifts of cash (I give my niece $50if she survives me) or property (I give my grandfather clock to my granddaughter, Nina) before the balance of the property, or residue, is distributed.

The residue may be distributed outright or in further trust, such as a trust for a surviving spouse or a trust for minor children. Be sure that all debts, taxes, and expenses are paid or provided for before distributing any property to beneficiaries because you may be held personally liable if insufficient assets do not remain to meet estate expenses. Although it is usual to obtain a receipt and refunding agreement from the beneficiary that states that he or she agrees to refund any excess distribution made in error by the fiduciary, as a practical matter it is often difficult to retrieve such funds.

In some states, you will need court approval before any distributions may be made. Many trusts, especially older ones, provide for income to be distributed to one person at one time and principal to be distributed to that same person a different time or to another person. For example, many trusts for a surviving spouse provide that all income must be paid to the spouse, but provide for payments of principal (corpus) to the spouse only in limited circumstances, such as a medical emergency. Never make assumptions, as the terms of every will and trust differ greatly.

Individual trustees

There is no such thing as a “standard” distribution provision. Unless a fiduciary has financial experience, he or she should seek professional advice regarding the inv. Estates may be closed when the executor has paid all debts, expenses, and taxes, has received tax clearances from the IRS and the state, and has distributed all assets on hand. Some states require a petition to be filed in court before the assets are distributed and the estate or trust closed. When such a formal proceeding is not require 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 document protects the fiduciary from later claims by a beneficiary. These formalities are recommended even when the other heirs are relatives, as that alone i. How do I title (own) bank and other accounts? For an estate, you should use Alice Carroll, Executor, Estate of Lewis Carroll, Deceased.

Individual trustees

An executor signs: Alice Carroll, Executor (or Personal Representative) of the Estate of Lewis Carroll, Deceased. You should open an investment account with a bank, trust company, or brokerage company in the name of the estate or trust. Where do I hold the estate or trust assets? All expenses and disbursements must be made from these accounts, and you should receive regular statements.

Most grantors or trustmakers of revocable living trusts—the individuals who create these trusts—serve as trustees themselves. A successor trustee is one who steps in to take over management of the trust for the grantor in the event that he becomes mentally incompetent or dies. Professionally implement the trust portion of the estate plan. Provide an independent decision-maker and process as required by the trust.

Approve and document discretionary distribution decisions where not directed by a separate distributions advisor. In addition, co- trustees must generally act cooperatively with each other, unless the trust explicitly grants certain duties to a single trustee. This means that each co-trustee must act with the full consent and knowledge of the other co- trustees. The trust should explicitly state the authority of the co- trustees. Submitting a petition generally shields the objecting co-trustee from any legal liability should any negative consequence result from the original action or decision.

The trust may explicitly dictate how to do this, but, most of the time, trustees have fairly broad discretion to manage the assets as they see fit. For example, a trustee can buy and sell property, invest in certain stocks, and open or close bank accounts. However, a trustee must record and notify the beneficiaries of every management action taken. Another responsibility of a co-trustee is to arrange for the payment of any taxes owed by the assets in the trust. For example, certain assets held in trust may be subject to estate taxes as well as income taxes.

Individual trustees

Co- trustees are also responsible for paying any legal debts or claims against the trust and have the authority to hire a tax attorney or accountant to carry out these duties. A living trust should clearly describe which assets the trustee should distribute to which beneficiaries and how and when to distribute those assets. Instea the distribution could follow some other event, such as when the beneficiary turns 18. There must be two trustees.

One trustee must be a fund member. If the fund member is an employee of the other trustee , the fund member and the other trustee must be relatives. Trustees in Good Standing. The corporate trustee company can have one or two directors, but no more. From our experience, we can tell you that individual trustees take on a big responsibility.

This can be difficult if the trustee is related to a beneficiary or has emotional ties to the family. Co-trustee: In this role, Charles Schwab assumes responsibility in tandem with another. It is not an honor, it is a job.

Some individual trustees accept the headaches, risks and the paperwork and attempt to do their own version of trust accounting and administration. In the first case, the trustee needs a lot of on-the-job training and support. They are looking for a plug and play solution. The name, Pinion, recalls the feathers of a bird’s wing responsible for the freedom of flight. A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries.

Learn more about trusts and how they can help you in estate planning. Revocable trusts let the living grantor change instructions. A SA Lawyer Will Answer in Minutes!

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