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Trust Administration

As if suffering the loss of a loved one weren’t hard enough, administering a trust on the deceased’s behalf can be complicated and confusing for the person assigned this role: the trustee. While trust administration is not supervised by the courts, it has a legal purpose: to transfer property from the decedent to the beneficiaries identified in that person’s trust. An administrative trust will have a federal taxpayer identification number and file its own income tax returns.

At Keating Law, PLC we are here to lift as much of the burden you bear as trustee as we can by making sure that all state requirements are met and that a proper accounting is given to all beneficiaries and creditors. We are focused on teaming up with other professionals to ensure you and your family of a secure future by:

  • Making tax determinations, especially of IRAs, 401ks, annuities, and pensions
  • Titling assets appropriately
  • Protecting our clients from the claims of others
  • Representing clients in trust settlement disputes through arbitration or litigation
  • Keeping appropriate records and receipts for tax purposes

It should be noted that IRAs and other retirement plans may create serious tax consequences if they are not handled properly.

What Trust Administration Involves

When a person dies, several things have to be accomplished to settle the estate: (1) assets have to be gathered and evaluated, (2) business affairs have to be settled, (3) debts have to be paid, (4) taxes have to be filed, and (5) assets have to be distributed as the decedent stipulated.

Why Having a Skilled Estate Planning Attorney Is Important In Detroit

Because reading and understanding all aspects of the decedent’s will or trust is an integral part of trust administration, and because almost all wills and trusts are written in legalese, having an attorney to explain and interpret is invaluable. For one thing, your estate planning attorney can help to familiarize you with the pertinent vocabulary so that words like “fiduciary” and “testator” do not put you off your game. Your lawyer will also help you understand the terms of the trust which may be extremely detailed or may leave much to your discretion. Being made a trustee is a serious business; someone you have been close to has entrusted you with a vital, even sacred, duty. Making sure you act on the advice of a trustworthy, knowledgeable legal professional will ensure that you feel up to the task.

Securing Estate Assets in Michigan

In trust administration, it is crucial to secure and value all assets promptly. You may be able to access some assets quickly as long as you meet certain prerequisites, such as having formal authorization from the court and being able to produce the death certificate. In the case of insurance, you will have to file a claim which may take somewhat longer to process.

For the tangible property of a substantial estate, a professional appraiser should be hired to assess the realistic value of the decedent’s jewelry, collectibles, furniture, autos, and other high-end possessions. The value of any real estate, residential or commercial, and/or business interests, must also be assessed. Depending on valuation, the court may require an inventory for the estate’s tax return. It also has to be determined whether the decedent had purchased enough insurance to cover his or her assets or whether more should be purchased. 

Dealing with Debts and Expenses

As the trustee, you will be in charge of using estate money to pay expenses accrued during administration of the estate as well as any bills the decedent left behind. In this situation, your estate planning attorney will help you to decide which payments should be made first. Your lawyer will also know how to protect you from personal liability. 
Often tax issues impact estate administration, since many trust and estate assets may be taxable on many levels.  Usually, a fiduciary will be required to file at least four different tax returns for the year of death.  A good professional advise you how best to minimize tax costs. It is very important that all debts, expenses, and taxes are paid or set aside before distributing any property or money to beneficiaries.

How to Close the Estate

As the trustee of the estate, you are responsible for closing it -- once all debts, expenses, and taxes have been paid and all the assets have been distributed. A trust terminates when a date or an event described in the will (such as the death of a beneficiary) passes.

It is very important that thought and care be given to the closing out of any trust or estate, since a trustee or personal representative can be personally liable for errors after an estate as closed.

It is usually recommended that even if formal proceeding are unnecessary, the trustee and his/her attorney have all beneficiaries sign a document confirming that they have received the assets they were entitled to, and if possible, waiving all claims against the trustee.

If all this material on trust administration sounds complicated, it’s because it is. This is where having a knowledgeable, talented estate planning attorney comes in handy. Thomas Keating has been successfully serving estate planning clients for 25 years. He is well-respected for his attention to detail and his compassion. Contact him at his Keating Law, PLC website or by calling him at 586.501.8399.

Keating Law serves clients throughout the greater Detroit area, including Macomb County, Wayne County, Grosse Pointe, St. Clair Shores, and Sterling Heights.



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24055 Jefferson Avenue, #101, St. Clair Shores, MI 48080
| Phone: 586-498-8400

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