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What Families Must Understand About Trust Administration

What Is A Trust?

In its simplest form, a trust administration is a legally binding agreement specifying when and how you’d want to distribute assets. These assets may include sentimental objects to your beneficiaries or the charity of your choice.  

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Parties Involved In A Trust


In several circumstances, the grantor is referred to as the donor, settlor, or trustee. An individual, couple, or organization whose possessions are to be included in the trust is referred to by this designation. 

According to the law, the grantor must designate a particular person as the trust beneficiary.  Any asset, including antiques, works of art, property investments, bank accounts, vehicles, etc., may be put into a trust.


Trustees are the parties in charge of managing the grantor’s assets. They also have much control over what happens to the assets, depending on the terms of the trust.

Trustees manage the estate’s assets in the beneficiaries best interests. Otherwise, they will be held liable for mismanagement of the assets. Their activities must demonstrate that they are working to increase the trust’s assets and acting to its most significant advantage.


A beneficiary refers to a person or group of persons or organizations benefitting from the trust’s assets. The trust mainly serves his, her, or their interests. The trustee administers it for a specific purpose and with a high degree of care, known as fiduciary obligations.

Trust Administrator

A trust administrator is usually appointed by the probate court to manage the estate of the decedent in case no will was created. In addition, a trust administrator is responsible for accounting, reporting, and making distributions to beneficiary accounts when required.  

As the main person in the trust administration process, they must be able to interpret complex laws governing trusts and make sure their decisions reflect those laws. They must also be mindful of any ethical considerations involved with their work.

5 Common Trust Options

Planning for the future of your loved ones might e easier if you understand your alternatives. There are several basic types of trust to help you choose what’s best for you while going through the estate planning process or while in the midst of the trust administration process.

Revocable Trust

In a revocable trust, the grantor has the right to modify or revoke the trust at any time for an indefinite time. Revocable living trusts and living trusts are other names for revocable trusts. This trust is created while the grantor is still alive. 

Once the grantor dies, the assets under a living trust are automatically transferred to its beneficiaries. This process should be simple if you choose someone to administer your trust.

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A revocable trust can assist you in avoiding probate, which is the procedure a court uses to settle your financial and legal concerns following your passing. The family may endure a protracted and costly probate process if no trust is made. Moreover, estates that are subject to probate can be converted into public records.

A revocable trust’s assets are seen as personal property by creditors and the IRS for estate tax calculations, which is one drawback. This implies that if you have debts at the time of your death, creditors may access your trust’s assets to satisfy those obligations. If your assets have the required minimum values, you can also be subject to estate taxes.

Irrevocable Trust

An irrevocable trust cannot be altered or revoked after it has been established. You may create an irrevocable trust during the estate planning or trust administration process. 

An irrevocable trust’s assets cannot be regarded as personal property. This implies that they aren’t considered when the IRS evaluates your inheritance to see if taxes are required. Additionally, assets held in an irrevocable trust won’t be subject to bankruptcy or other legal processes if you file for bankruptcy or fall behind on an obligation.

Charitable Trust

With the help of a trust administrator, a charitable trust can be a wise choice if you wish to leave money to charity in a way that minimizes your estate taxes. The trust’s assets aren’t regarded as personal property. That means estate taxes won’t apply to them.

You can reserve certain assets for one or more institutions via charitable lead trusts, and the remaining assets can be distributed among your beneficiaries, such as your spouse or children. Irrevocable implies that no one can change its terms once you form a charitable lead trust.

Two charity trust types that are commonly available are charitable lead trusts and charitable remainder trusts, or CRTs. A charitable remainder trust is an irrevocable trust that you can utilize as an income source until you die. If you create a CRT, you contribute assets like cash, property, or stocks to the trust.

Spendthrift Trust

In a spendthrift trust, assets are distributed to the beneficiaries gradually, not all at once. It will pay the beneficiaries over a specific period, which can help guarantee the longevity of your funds.  By opting for trust administration, implementing it will surely be no problem.  

Until they are distributed to the beneficiaries, the money in a spendthrift trust is not regarded as personal assets. This implies that in the event of a non-payment of a loan or bankruptcy, creditors may access funds held in the trust.

Testamentary Trust

A testamentary trust is implemented through a will. Testamentary trusts, often called trusts under will or will trusts, do not take effect until after the grantor’s death. 

The final will contains directions for the establishment, trust administration, and distribution of the grantor’s assets. Additionally, it guarantees that the beneficiaries only get their inheritance for a specific period. 

It’s critical, however, for the beneficiaries to be aware that assets held in a testamentary trust typically go through the probate procedure. This means that the inheritance becomes a matter of public record, depriving the beneficiaries of some of the seclusion that comes with other kinds of trusts.

What Is Trust Administration?

Administering trust assets for the interest of the beneficiaries following the conditions of the trust agreement and after the grantor’s passing is referred to as trust administration.

Many procedures must be accomplished to protect efficient trust administration. Working with a lawyer is advised to make the process easier for the trustees during each step.

Trust Administration Procedures

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Notice is given to all beneficiaries. All beneficiaries and the heirs of the grantor get a notification. Depending on the discretion, the beneficiaries are given a specific time after getting a report to submit a trust dispute. 

A trustee is assigned. If the trust owns real estate, they will give the successor trustee title to guarantee that the property will be managed according to the grantor’s instructions. For each piece of real estate held in a living trust, an affidavit and a certified copy of the death certificate must be recorded. 

The new trustees receive the property’s title instead of the dead settlor through this procedure. Usually, the affidavit and a form about changing ownership are both recorded at the same time. 

The trustee must submit the appropriate exemption form if real property is transferred from parents or children by any method excused from property tax reassessment. It is better to seek assistance from a trusted lawyer when creating these documents.

The trustee identifies all trust assets. After dealing with the real estate, the trustee must identify any other trust assets, including investment and bank accounts, and change the ownership of those assets to reflect the trustee’s status as the successor trustee. To ensure that any income received from funds held in the trust’s name is properly reported to the IRS, the trustee must first get the trust’s federal tax identification number.

The trustee pays the debt of the grantor.  The succeeding trustee must settle the obligations and liabilities of the grantor. Since estate and income taxes may be due if the estate is vast, taxes can be particularly challenging. 

The trustee must determine the decedent’s estate’s valuation to determine if the grantor has to submit a federal estate tax return. The trustee must submit the federal estate tax return form if the value exceeds the exemption limit. Working with a lawyer to ascertain whether a federal estate tax return is required is highly advised.

Importance Of Trust Administration

When a trust has a variety of investments and beneficiaries, it may become highly complicated but can be simplified through trust administration.

Trust administration is essential because it ensures that your assets are appropriately managed and transferred to your beneficiaries per your instructions.  

Trust administration can help lessen your stress in managing your assets.  


To protect your hard-earned money, you must let a trustee administer your trust funds.  If you don’t have someone managing your assets properly, they could end up being wasted or lost altogether. So make sure you have someone take care of your assets so they will stay in your jurisdiction. What is the best way to do it? – Trust administration.

If you’re considering establishing a living trust, you can set up a complimentary evaluation with one of Weiner Law’s trusted lawyers. Weiner Law is an estate planning firm based in San Diego, California, devoted to building an estate plan according to your requirements.