Trust Administration Lawyer Helping Residents in New Bedford, Hyannis & Easton
Individuals and families who wish to avoid probate and who have other estate planning objectives often establish trust-based estate plans. A properly structured trust can also minimize estate tax and help to plan for incapacity. While a trust does avoid probate, all trusts must go through a trust administration phase to honor and carry out the terms of the trust.
At Surprenant & Beneski, P.C., our team of estate planning attorneys help clients navigate the complicated trust administration process in Massachusetts. In addition to providing advice and guidance to trustees, our team also works to protect the rights of beneficiaries. When you consult us, you will have confidence knowing that your interests will be protected.
What is the role of a Trustee in the Trust Administration Process?
A trustee is considered to be a fiduciary, which places the trustee in a position of trust with the beneficiaries. This means that a trustee must act in the best interests of the beneficiaries and preserve the value of the trust assets. Under the Massachusetts Uniform Trust Code (MUTC) a trustee can be held liable for mistakes or misconduct.
In particular, the duties of a trustee include:
- Notifying beneficiaries and other interested parties of the grantor’s passing
- Inventorying and appraising trust property
- Transferring property into the trust
- Obtaining tax ID numbers
- Filing estate tax returns
- Having trusts evaluated
- Distributing assets to the beneficiaries
While this seems straightforward, administering a trust can be overwhelming. If the trust assets are significant, the trust may require that its principal and income be treated differently. Income may initially be distributed to one beneficiary, for example, while the principal may be subsequently distributed to the same or other beneficiaries. It is also common for a trust beneficiary to receive income only, while the principal is held by the trust to be used for a medical or other emergency.
Regardless of the arrangements, properly administering a trust requires that the trustee be capable and dependable. Moreover, the trust administration process can be further complicated by conflicts between the beneficiaries or claims of undue influence. At Surprenant & Beneski, we work to help trustees avoid mistakes that could result in litigation.
A Trustee’s Duty to Provide Information to the Beneficiaries
While the Massachusetts Uniform Trust Code (MUTC) provides for trusts to be administered with minimal judicial intervention, a trustee has a duty to provide information to the beneficiaries. In particular, trustees are required to notify qualified beneficiaries of the name and address of the trustee within 30 days of being appointed. Trustees must also send annual and final accountings to beneficiaries who are entitled to receive distributions of income and principal during the accounting period. A trust accounting should disclose the assets and liabilities, distributions of principal and income, and the trustee’s compensation.
In other words, trustees have a duty to act impartially on behalf of the beneficiaries and provide them with information about action that has been taken. As such, this requires maintaining accurate records and providing the beneficiaries with a clear accounting so they understand what the trustee has done. It is worth noting that a trust accounting is not the same as a tax or financial accounting customarily prepared by accountants.
This is why it is crucial to work with an estate planning attorney who is familiar with the requirements of the MUTC and can assist with preparing a trust accounting. Our legal team can help to ensure that all assets are properly titled, required records and receipts are maintained, and that qualified beneficiaries receive proper trust accounting.
Contact Our Southern Massachusetts Trust Administration Attorney
If you have been designated as a trustee or named as a beneficiary of a trust, the best way to protect your interests is to consult the experienced trust administration attorneys at Surprenant & Beneski, P.C. We provide informed representation to trustees to help them avoid mistakes that could lead to legal liabilities and financial penalties. At the same time, we work with beneficiaries to ensure they receive the assets that were intended for them under the terms of the trust. Of course, the trust administration phase can go more smoothly if the trust is properly structured which is why we work with clients to design well-conceived trusts that will preserve their wealth for future generations. Please contact our office today to speak with our trust administration attorneys.