This page shows a sample Trust Administration Checklist for the trustee or successor trustee of an estate planning trust, such as a living trust or another type of trust, after the death of the settlor, also sometimes referred to as the grantor or trustor. The Trustee Checklist shown below provides a list of steps the trustee may need to complete during the process of
1. The first step in administering a trust is to gather all official documents and records you will need during the process. Collect all estate planning documents and other important records of the deceased, including:
Last will and testament, trust documents, including any trust amendments and restatements, and the Certification of Trust;
Several certified copies of the death certificate for the decedent from the funeral home or vital records office;
Life insurance policies, annuity contracts, pension plan statements, IRA and 401k account statements, and related policies and retirement plan documents;
Birth certificate and social security number;
Marriage license, divorce decree, and property settlement agreement if applicable;
Most recently filed federal and state income tax returns;
Documentation of military service, such as serial number and veteranís discharge papers;
Financial statements, account statements, and other financial records.
2. If you are also serving as executor or personal representative of the deceased personís estate, you may want to review the Pennyborn.com Executor Checklist for estate administration for a list of steps required to settle an estate.3. Review the trust agreement thoroughly for information regarding your powers as trustee and the limitations on your authority. Post executor bonds if required. Consult a trusts and estates attorney to ensure you fulfill your duties as trustee in accordance with applicable law.If the living trust contains marital deduction provisions or bypass trust provisions, it is essential to consult an attorney and a tax professional before taking any action regarding trust property.
4. Secure all trust property. Review the contents of any
safe deposit boxes held in the name of the trust. Create an inventory of property, accounts, and other assets in the trust.5. Meet with an attorney and tax advisor. If the trust property includes stocks, bonds, limited partnerships, a business, rental property, or other investments of significant value, consult a financial planner in addition to an attorney and tax professional. See Find a Financial Planner.Manage trust investments prudently. You may need to open a brokerage account or other investment account to hold securities owned by the trust or invest trust funds. A trustee should get professional assistance if necessary to properly perform the trustee investment duties.6. Establish a bank account for the trust. For a list of steps involved in opening an account for a trust, see our section on how to Open Trust Account.7. Apply for insurance proceeds, employment compensation, government benefits, and other types of benefits that are payable to the trust, such as annuity contracts, death benefits on a life insurance policy, and IRAís, 401kís, 403bís, 401aís, and pension plans.8. If you plan to seek beneficiary consents, waivers or releases, consult an attorney about drafting enforceable language based on applicable state law. Review our article on Trust Beneficiary Release.9. Maintain accurate records, accounts, and financial statements regarding all trust income, expenditures, sales, transfers, and transactions. You will need these records to prepare a Trust Accounting Form.10. Review the grantorís estate planning documents to determine if he or she disinherited an heir or left only nominal amounts to heirs that may have expected more substantial inheritances. Identify any potential trust dispute or claim that may be brought by a disgruntled heir. See
Will and Trust Disputes. Consult an attorney regarding the best way to handle any potential claim against the trust or the trustee.11. Pay debts and expenses regarding trust property. Pay federal, state, and local tax obligations of the trust and file required tax returns with the help of a tax advisor. For a list of tax returns you may be required to file, see tax returns due.12. Complete a trust accounting and provide the accounting to beneficiaries if required. See living trust accounting. If a distribution is being made at the same time, the trustee may enclose the accounting report with the trust distribution letter.13. Distribute trust income or property to trust beneficiaries according to terms of the trust agreement. Complete transfer deeds and other change of title documentation. Document distributions to beneficiaries in a formal letter indicating that a final distribution has been made. For an example of how to write a final distribution letter to beneficiaries of the trust, refer to our Trust Distribution Letter form.14. Prepare documentation closing the trust. Completing the paperwork to close a trust is an essential but often missed step in the trust administration process. For a list of steps, see our checklist on How to End a Trust.
Trustee Checklist Instructions
Before using the Trustee Checklist, please read these instructions. When serving as trustee, you may need to complete steps other than those listed on this sample Trustee Checklist. The steps required to administer an estate planning trust vary depending on many factors, such as the size of the trust, the state where the trust is administered, the terms of the trust, the number and type of trust beneficiaries, and the types of assets held in the trust. Although some items on the Trustee Checklist may not apply to the trust you are settling, review all items on the list carefully anyway.This form is not legal advice. This form is merely an educational template of a general trustee checklist used in trust administration in the United States. To properly administer a trust, always consult a licensed attorney before taking any action as trustee. A lawyer familiar with your unique situation can advise you on how to comply with applicable Trust Law in the U.S. and the provisions of the trust you are administering.This is only an example of a typical trustee checklist. It is not a comprehensive list of the duties of the successor trustee of a living trust or any other type of trust.
In addition to completing the steps shown on this Trustee Checklist, the trustee of a trust in the U.S. must take all actions necessary to fulfill the required fiduciary duties of this position. Before assuming the role of trustee, it is imperative to have an understanding of the implications of being a fiduciary. For more details on your fiduciary duties as trustee, review the list below.
The Fiduciary Duty of a Trustee
As you start the process of settling a trust, you may want to keep the following in mind:a. The trustee is a fiduciary and must fulfill various fiduciary duties to trust beneficiaries under the terms of the trust and applicable laws.b. The trustee may be held accountable to beneficiaries of the trust for actions taken as trustee, including actions taken during
estate administration or trust administration.c. If a trustee breaches their fiduciary duty, the trustee may be liable to the trust beneficiaries and others for losses and damages that are a result of the trustee's breach.d. If at any time you are uncertain about what steps to take or your duties as trustee, contact an attorney promptly.
Related Articles for Trustees
It is possible to perform your duties as a trustee while saving money on legal fees by performing many of the steps involved in administering a trust on your own. However, it is important to understand which steps require the involvement of an experienced attorney to avoid mistakes for which you may be liable as trustee.If you possess the skills necessary to perform trust administration tasks on your own, you may be able to find an attorney that is willing to work with you to keep trust administration fees low while advising you on critical steps in the process. Nevertheless, if you do not have the time or abilities to properly perform the work to settle a trust, let someone that is qualified manage the trust administration process.The cost to administer and close a trust may be reduced by carefully negotiating the fee agreement with the probate or trust lawyer. For tips on how to discuss the legal fee agreement and how to request flat fee arrangements, see our article on finding an attorney.Many living trusts are drafted to take full advantage of tax saving provisions under existing law. However, to the lay person, terms like bypass trust or marital deduction can be extremely confusing. If you attempt to administer a trust without having a full understanding of these trust provisions, you could incorrectly distribute property from the trust and create a tax problem or a will and trust dispute among the beneficiaries. To learn more, review our free Guide to Living Trusts.Copyright 2020 Pennyborn.com. ALL RIGHTS RESERVED. Updated March 22, 2020.
INFORMATION ON THIS SITE, INCLUDING ARTICLES, ESTATE PLANNING FORMS, AND THE ESTATE PLANNING BLOG, DOES NOT CONSTITUTE LEGAL, FINANCIAL OR TAX ADVICE. Pennyborn.com is not a law firm and is not a substitute for a lawyer. Your use of this site does not create an attorney-client relationship. Information on this site is for educational purposes only and may not be accurate, complete or up to date.
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