Trust Administration?

Want To Know About Trust Administration? Here’s A Quick Overview

Edited by Jennifer Elliott

Every trust is different. Some trusts hold a small amount of property and are terminated within a very short time after the grantor’s death. Other trusts hold millions of dollars worth of property and provide income to trust beneficiaries for years. 

Sometimes a trust becomes the subject of litigation when a beneficiary disputes how the trustee is administering the trust. A trust dispute can also arise when a disgruntled heir challenges the testator’s estate plan. See will and trust disputes.

The amount of work involved in administering a trust also varies depending on a number of factors, such as the type of trust, the number of beneficiaries, the amount of property in the trust, the duration of the trust, the number of creditor claims against the grantor’s estate, and the quality of the grantor’s record keeping. To learn about the type of trust you are administering, see more about trusts.

While each trust is unique, trust administration typically involves many of the following activities:

1. Obtaining legal documents and records necessary to administer the trust and certify the validity of the trust when dealing with third parties;

2. Collecting monies owed to the trust; See open trust account.

3. Maintaining an inventory of trust property;

4. Consulting financial, tax, and legal advisors regarding proper administration of the trust;

5. Paying debts and expenses of the trust;

6. Managing trust assets and investments; See trustee investment duties.

7. Obtaining appraisals or valuations of trust assets;

8. Selling trust property;

9. Keeping accurate records of trust income and expenditures;

10. Filing tax returns.

11. Providing a trust accounting and other information to trust beneficiaries;

12. Distributing trust income and property to beneficiaries; and

13. Executing documents to transfer title to trust property to beneficiaries.

14. Closing a trust at the end of administration. See how to end a trust.

BEWARE: Laws Trustees Must Follow in the United States

If you are a first time trustee, you may not be familiar with the fiduciary duty of a trustee or the guidelines trustees must follow when managing trust property. Failure to perform trustee duties in accordance with applicable laws can result in personal liability of the trustee. To learn about state laws that govern trust administration, see trust law sources.

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About the author

Jennifer Elliott

A member of Wealth Counsel, a nationwide lawyers association of 4,000 estate planning professionals, Ms. Elliott provides her clients best-in-class estate planning technology for their documents. She keeps up to date on the law with education forums, labs, and seminars. Ms. Elliott regularly leads seminars for legal professionals as well as the public to educate the community on protecting their assets and loved ones.