When you agree to serve as successor trustee of a living trust or trustee of any other type of trust, it comes with a great deal of responsibility as well as legal liability. You may not realize what you embarked upon until it is too late to turn back. All sorts of questions will arise and many will be time-sensitive. While the ideal scenario is to have a trust attorney answer all your questions, the legal bills will mount quickly if you use that approach. In some cases, a trustee must answer basic questions about trust administration without legal help. Most trustees purchase one or two reference guides to use throughout the process.
One of the most popular guides for both new and experienced trustees is The Trustee's Legal Companion: A Step-by-Step Guide to Administering a Living Trust by attorneys Liza Hanks and Carol Elias Zolla. Their book covers all essential elements of the trust administration process and includes chapters on some of the more complex tasks of being a trustee, such as trustee investment duties, preparing a trust accounting, distributing property to beneficiaries, preparing final tax returns, closing a trust, and other complex tasks a trustee must perform.Written by estate planning attorneys, this comprehensive trust administration manual explains what to do when complications arise, such as when certain trust assets are not titled in the name of the trust. The Trustee's Legal Companion by Liza Hanks and Carol Elias Zolla is a great resource at an affordable price with over 400 pages of valuable information, including state-specific resources. Check out the 5th edition published in 2019.
Trustee Checklist
In addition to using a detailed manual on trust administration, you may also want to have a short form checklist of trustee duties. For a brief list of the steps involved in administering a living trust, refer to our Trustee Checklist.
Dealing with Spendthrift Beneficiaries
Dealing with a beneficiary that has a lot of debt or responding to creditors about bills owed by a trust beneficiary are two of the most unpleasant tasks a trustee will face. Trustees need to be aware of the state law differences that may dictate how the trustee must respond to these circumstances. For a list of applicable state laws on beneficiary debts, refer to our section on
Debts Trust Beneficiary.Updated on January 4, 2019.
Choosing a Trust Administration Guide
It may be difficult to find books for trustees that discuss the specific questions you have about trust administration. If you are administering a small trust and do not have the assistance of a trust company or probate attorney, you should get a reputable trust administration manual to refer to on a regular basis until you close the trust. See
How to End a Trust.
When choosing a trust administration guide, look for one that contains trust administration forms, checklists on how to administer a trust, sample letters to beneficiaries, and instructions on how to perform routine trustee duties such as preparing a
Trust Accounting and filing tax returns. A good trust administration book should also include other valuable tools to help trustees wade through the process of trust administration. To ensure you complete all the steps involved in settling an estate planning trust, review our free
successor trustee checklist form.Although referring to a trust administration manual can help trustees perform some of their duties without professional legal help, a first time trustee can commit costly errors. A better approach is to discuss your plan for administering the trust with an attorney first to determine what steps you can perform and what actions should be left to the lawyer for the trust. Many trust attorneys offer a free consultation.If you think you can administer a trust without an attorney, you should make sure you have a complete understanding of trustee liability. To learn more about trustee duties and whether trustees can be liable to beneficiaries and heirs, read our article
for trustees.
Settling an Estate and a Trust
Some successor trustees are also responsible for settling the decedent's estate at the same time. Despite having an estate planning trust, some of the decedent's assets may be subject to probate. If so, you have to complete all the steps involved in estate administration as well as trust administration. Using a book like The Executor's Guide: Settling a Loved One's Estate or Trust by attorney Mary Randolph will make it much easier for you to handle the dual roles of personal representative and trustee. For trustees who are also named executor or personal representative of the decedent’s estate, this guide may be used in conjunction with the book, The Trustee’s Legal Companion.The Executor's Guide takes the first time executor through the same step by step approach to estate administration. It includes several chapters on handling trusts which may be part of the deceased person’s estate, including living trusts, trusts for children, and marital bypass trusts.The Executor's Guide: Settling a Loved One's Estate or Trust by Mary Randolph also takes the executor through the process of executor bonds, collecting monies due the estate, paying creditor claims, navigating probate, and handling assets that pass outside of probate. This comprehensive guide is currently one of the best books available for executors and administrators of an estate.
Avoiding Liability As a Trustee
As a trustee, one of your first concerns may be avoiding liability. You also probably have questions about how to send notices to beneficiaries, file tax returns, and manage trust assets. For an overview of these complex duties of trustees, review our free guide on how to administer a trust. This is an additional resource you can refer to when settling an estate or closing a trust.For tips on how to avoid liability as a trustee, see
Trust Beneficiary Release.
Books on Trust Accounting
One of the most highly regarded books on trust accounting is the Fiduciary Accounting Guide by Robert Whitman and Lawrence J. Kramer.
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