The administration of a trust is a complex process. It requires an understanding of legal requirements and fiduciary responsibility owed to beneficiaries.
Trustees are required to follow specific instructions in the trust document and to state and federal laws. They must also ensure that assets are distributed according to the terms of the trust.
Inventory of Assets
As the successor trustee, one of your first steps in probate administration is to make an inventory of all assets held by the Trust. Often, this can be a daunting task but it is important to be thorough and organized to ensure the final inventory submitted to the probate court is accurate and complete.
As you go through your decedent’s desk drawers and file cabinets, search for receipts, warranties, ownership titles, deeds and any tax return documents you can find. These may help you locate the assets you need to list in your inventory.
Lastly, take photos of all of the personal property to back up the written list and its estimated value. This is a legal requirement to prepare an inventory of personal property and it can help ensure that nothing goes missing or is not accounted for.
In the end, your inventory will give you a clear picture of what the estate holds so that you can distribute it in accordance with your wishes. However, it is best to consult an experienced estate planning attorney to make sure you’re doing things properly and following the law.
Record Keeping
The Trust administration must have an effective record keeping system. This system should provide a comprehensive record of all assets held by the trust from inception to closing. This includes accounting for receipts and disbursements, gains and losses, distributions to beneficiaries, changes in the nature of assets, and a statement of the remaining balance.
It should also contain an audit trail of all records created or destroyed. This is vital for tracing unauthorised activity and to ensure compliance with business and legal guidelines.
Ultimately, an institution’s record-keeping structure needs to be understood by all staff and reflected in their daily work. This is usually best achieved by compulsory training sessions, organised with input from personnel and IT staff.
A well-designed and implemented record management strategy will help to minimise the risk of organisational content becoming lost or damaged. It will also enable staff to work how and where they need to, ensuring records are easily accessible.
Accounting
Trust administration requires a thorough, accurate and complete record keeping system. In addition, strong internal controls should be in place to prevent fraud and abuse. This includes falsification of expenses and misapplication of trust commissions and fees.
A properly maintained accounting should include a cash ledger detailing income and principal cash as well as an investment ledger for any assets held by the trust. The cash and investment ledgers should reflect transactions in chronological order.
The trustee should keep a detailed inventory of all assets owned by the trust, as well as copies of account statements, invoices and receipts. These records should be regularly updated to avoid the possibility of inaccurate or missing information.
The trustee is also required to provide information to beneficiaries of the trust in a reasonable amount and time. Beneficiaries are entitled to know how the trust assets are being managed, how they are disbursed and how the trustee is being compensated.
Distribution
The distribution of assets held by the Trust administration is a vital part of ensuring that the beneficiaries of a trust receive their inheritance. Trustees have fiduciary duties to follow the terms of the trust and distribute funds within a reasonable time frame.
Generally speaking, the distribution of assets from a trust should occur within twelve to eighteen months after the trust administration begins. However, this depends on how complicated the estate is and whether any properties or other assets are required to be bought or sold before they can be distributed.
If a trustee fails to distribute funds in a timely manner, there are remedies available for the beneficiaries of the trust. Those remedies include seeking a court order to distribute funds, reimbursement for stolen assets, or the replacement of the trustee.