The basics of trust administration

When a person passes away and a trust document is in effect, the trust will have to be administered according to the wishes of the settlor (originator) of the trust. Trust administration has many steps in it and often, an attorney is called upon to not only set up the trust, but to administer it when the time is appropriate.

Trusts are created specifically to avoid probate, which involves legally disposing of someone’s assets when they pass away. In probate, courts are called upon to make decisions that may or may not be in line with the desires of the deceased. A trust outlines these wishes beforehand, ensuring a much smoother transfer of assets.

Trust administration begins by notifying all beneficiaries and the settlor’s heirs. The beneficiary may file to contest the trust within a specified time frame. After that, they surrender the right to do so.

When a trust contains real property, the administrator bestows title to the successor trustee, transferring in a way that is consistent with the deceased wishes. By using a trust, no court fees should be incurred, and when a parent passes property down to a child, in many cases it may be exempt from property tax reassessment.

A trust administrator will make sure all bank accounts and investment accounts have been identified, and then transfer those assets into a successor’s name. Any income from this transfer needs to be reported to the IRS.

A trustee must also pay any debts and satisfy all liabilities of the trust as well. This includes income taxes and possibly estate taxes in cases where the estate meets certain thresholds. It is incumbent on the trust administrator to keep detailed records to be able to provide accounting proof related to the property if called upon to do so.

Once all of these obligations have been taken care of, the trust administrator can distribute the remaining assets in the trust and close out the trust if the situation dictates.

RMO LLP provides personal and efficient inheritance dispute services to individual and institutional clients. The firm’s attorneys focus on probate litigation involving contested trust, estate, probate, and conservatorship matters. Serving California and Texas, with offices in Los Angeles, Pasadena, Orange County, San Diego, Fresno, the Bay Area, Dallas, and Houston. For more information, please visit

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About the Author

Scott Rahn, Founding Partner

Scott Rahn resolves contests, disputes and litigation related to trusts, estates and conservatorships, creating a welcome peace of mind for clients. He represents heirs, beneficiaries, trustees and executors. He utilizes his experience to develop and implement strategies that swiftly and efficiently address the financial issues, fiduciary duties and emotional complexities underlying trust contests, estates conflicts and probate litigation.

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