You’ve been named Trustee what do you do now?

Whenever a trust is created, the creator of the trust, also known as the “Grantor,” picks a person to administer the trust. That person is the “Trustee.” Often times, the Grantor and the Trustee are the same person. However, once the Grantor dies, someone must take over and carry out the wishes of the Grantor. If that’s the case, whomever the Grantor picked as Secondary Trustee, will succeed the Grantor as Trustee. 

So, let’s say you’re in this position. What do you do? 

Find out What the Trust Says

First thing you need is a copy of the trust. To effectively act on behalf of the trust, you’ll need to know what it says. Specifically, you’re going to want to know the following: 

Your powers as trustee

The beneficiaries to the trust; and 

How trust assets must be distributed

Depending on how the trust was drafted, it may be difficult to ascertain any one of the above. Therefore, it is generally advised that you let an attorney look over the trust to ensure proper compliance with the trust terms. 

Find Out the Trust Assets

The trust only control assets that it owns. Therefore, it is important to know what is in the trust before you know how to effectively administer the trust. There may not be a list of assets along with the trust. To find out what the trust owns, you may need to do some investigating. 

If the trust owns real property, there will be a deed for the real property that reflects the trust’s ownership. If the trust owns accounts, the statements for the accounts will come in the name of the trust. However, if the trust owns personal items, it may not be so clear. Usually, a trust will include an “assignment of personal property,” which conveys all the Grantor’s personal property to the trust. If that’s the case, and there’s a validly executed assignment of personal property, then the personal property will be considered to be a trust asset. 

It’s also important to note that many folks who create trusts will have a companion will that leaves everything to their trust. Therefore, if there are assets that they forgot to put into their trust during their life, those assets will flow into the trust at their death. 

Make Sure You File Taxes

Often times, a trust will owe or be required to file taxes. It is important that you work with a CPA to ensure that this is taken care of in a timely manner. 

Make Sure the Trust is Terminated 

Once everything has been distributed, the trustee has been adequately compensated, and all taxes have been filed and returned, the final step is to have the trust terminated. It has served its purpose and should, therefore, cease to exist as a legal entity. Termination puts everyone on notice that the trust has been adequately wrapped up. 

Conclusion

Being a trustee is an important position. You want to make sure you do the job correctly. If you have questions about trusts, Give us a call 704-259-7040. 

https://mcelderlaw.com/scheduling/
Brenton S. Begley

Attorney at Law

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Greg McIntyre, JD, MBA

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Greg McIntyre, founder of McIntyre Elder Law, is more than just an attorney. As a Navy Veteran, father to six kids, and a loving husband, he values family deeply. This drives his commitment to helping clients safeguard their futures and pass down legacies.

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