When a loved one passes away, it is a great comfort to know that one's family affairs are in the hands of the decedent's Trustees and counsel. Our firm provides trust administration services to help our clients and Trustees administer the Trust Estate Plan pursuant to the terms and conditions set forth in the Trust Documents.
Types of Trusts
Revocable Living Trusts
The revocable living trust is a very popular estate planning tool which avoids probate, provides a high level of privacy and is very flexible, as it can be revoked or amended at any time prior to death.
Irrevocable trusts are generally much less flexible than revocable living trusts because the grantor's ability to amend them is very limited. If protecting provisions are used, these trusts can protect assets for multiple generations.
Irrevocable Life Insurance Trusts
Irrevocable life insurance trusts protect the life insurance policy's cash value. They remove the life insurance from the estate, thus reducing estate taxes, and also serve to avoid probate.
Children's trusts remove assets from parents' estates, protect assets from creditors and can help to reduce income taxes.
Charitable trusts provide creditor protection. Appreciated assets can be sold free of capital gains tax, estate taxes can be minimized and charitable trusts can benefits heirs and charities of choice.
Qualified Personal Residence Trusts
Qualified personal residence trusts provide creditor protection. They allow for the option to remove a home from an estate while the individual can continue to reside in it and can receive full step-up in tax basis.
The Trust Administration Process
The administration process entails the following steps:
Step 1 - Gathering the Estate
Our first meeting will focus on gathering all of the pertinent information about the decedent, estate documents and financial data. The designated Trustee will discuss the relevant preliminary information with us and explain the process ahead.
Step 2 - Evaluation
The next step in the process will be for our firm to review the existing estate planning documents, which may include deeds, brokerage statements, IRA accounts, bank statements, balance sheets and income statements. The number and nature of these estate documents and any other related documents determine the complexity of the estate's administration.
Step 3 - Initial Meeting
We will next meet with the Trustee and/or family members to discuss the legal documents and the asset structure of the estate administration process. Through an in-depth conversation, the Trustee will come to understand the family's dynamics, needs and desires. Based on what is learned, recommendations, deadlines and Trustee responsibilities will be presented. We assist by outlining the tasks that lie ahead so that family members gain a clear understanding of each step and an approximate timeline for completion.
Step 4 - Engagement
Understanding the Progression - Upon engagement by the Trustee, the Trustee will officially become our client and will execute the initial administration documents. We will provide the Trustee with a Trustee's Administration Binder. The binder will contain tabs which detail the engagement agreement agendas for each of the upcoming meetings and copies of all relevant correspondence and other related documents.
Step 5 - Creating the Trustee's Authority
We will prepare and explain the necessary documents that the Trustee needs in order to acquire legal authority to act on behalf of the estate. After signing these documents and with the Trustee's authority, the Trustee is empowered to send the required notices to beneficiaries, family members, financial institutions, and the appropriate governmental agencies. A tax and accounting professional is typically engaged for the process of gathering, charting, and determining the character and value of each asset, as well as determining the applicable income and estate tax issues.
Step 6 - Analyzing and Testing
We will typically meet with the accountant and financial advisor in order to create a plan for the allocation, distribution and division of assets. The plan should consider the delicate balance between the dictates of the estate plan's documentation, the Trustee's fiduciary duties and objectives, income tax and estate tax issues, and the family's desires.
Step 7 - Presenting the Preliminary Plan
We assist the Trustee through the preliminary planning design, step-by-step, and record every reaction, critique, and idea in order to further tailor the estate plan. Our collaborative team of CPAs, financial advisors and counsel will explain the tax and practical ramifications of different options and choices as they arise.
Step 8 - Building the Estate Plan
Our preliminary Estate Plan will thus be enhanced by the Trustee's input. Through the use of narratives, graphs, charts, models and schedules, our team will guide every aspect of the Estate Administration Plan into a final, easy-to-use format.
Step 9 - Implementation of the Estate Plan
Our team will review and confirm all aspects of the estate plan with the Trustee, who will execute relevant documents in order to begin the implementation process. We work with the Trustee and will assign every detail of the plan to the appropriate advisors for immediate action. Each advisor will provide the Trustee with a detailed plan and implementation timeline and schedule.
Step 10 - Completion of the Estate Plan
We will provide the Trustee with details demonstrating that the process of administering the estate has been successfully completed. Possible estate planning issues, concerns and needs will be reviewed with the Trustee. All outstanding questions will be addressed and answered.