Trust Administration

A trust instrument is a document executed by a settlor (meaning the person who creates or contributes property to the trust), which contains the terms of a trust. One of the most common types of trust – a revocable trust – is typically a trust created by the settlor and controlled by the settlor during his or her lifetime to manage his or her own assets. Upon the death of the settlor, the trust becomes irrevocable and the trust instrument provides the instructions for how the assets are to be managed post-death. Often, the named successor trustee has no specialized knowledge regarding trusts and is unaware of the duties and obligations that come with accepting the role as successor trustee.

A successor trustee is entitled to representation by an attorney with respect to the administration of the trust. Moreover, their attorney is entitled to reasonable compensation for those legal services, to be paid from the assets in the trust. The trustee is also entitled to compensation that is reasonable under the circumstances.

The administration of the trust can range from a fairly straightforward process of distributing trust assets to trust beneficiaries, to an intricately complicated process of creating new trusts along with restrictions and instructions for distributing trust assets. The trustee must have a suitable grasp of what their duties entail to ensure compliance with the terms of the trust and Florida law. When handled properly, the trust administration can be an effective method for distributing the assets of the settlor in the process he or she contemplated during the creation and/or modification of the trust. However, for an unwary trustee, the trust administration process can be cumbersome and fraught with potential traps.

A successor trustee must take certain steps to administer the trust. Those steps include:

• Contacting beneficiaries and keeping them informed;
• Gathering and investing the trust-maker’s assets;
• Notifying potential creditors;
• Paying debts;
• Filing tax returns; and,
• Distributing assets and/or income to beneficiaries in conformity with the trust’s provisions.

The experienced trust attorneys at the Law Offices of Glenn & Glenn will assist successor trustees who lack the time, resources or knowledge to personally deal with the complexities of trust administration.