Learn about replacement trustee responsibilities
If you have a Living Trust, your replacement administrator must follow certain procedures to carry out your desires. In general, the trustee’s responsibilities are comparable to those of an administrator charged with carrying out the provisions of a will. However, the trustee’s responsibilities are carried out independently of the court-mandated succession procedure. The custodian is led by the conditions of your trust as well as the broad terms of your state’s trust statutes. Typically, state laws only provide broad requirements for trusts and caretakers and do not specify specific requirements that must be met at the time of your demise.
The replacement administrator starts the process of carrying out the provisions of your Living Trust that provide for payments to your heirs upon your demise. This procedure entails naming a replacement administrator, settling trust disputes, getting a government identity number, and establishing a bank account in the trust’s name. Unlike wills, there is no obligation for living estates to provide notification to relatives, recipients, and debtors.
Table of Contents
Trustee Responsibilities
Gathering Assets: The replacement trustee’s first significant job is to examine the trust’s assets and gather any additional assets that may come into the trust. Reviewing documents, sending your spill over will to succession (if required), assuming actual possession of trust assets, and assessing the property are all part of this process. Unlike the succession procedure used to carry out the provisions of a will, a living trust does not require the filing of an inventory description.
Payment of Debts and expenditures: Before giving payments to the recipients, the new administrator must also decide what debts and expenditures should be paid. The successor trustee is also in charge of claims, successor trustee costs, legal fees, funeral tax returns, and other tax returns. To cover these expenses, the new administrator may have to sell assets. This power is typically granted to the administrator of a living trust.
Asset Distribution: Once the obligations and expenditures, including taxes, have been settled, the new administrator must distribute the leftover assets properly. This is accomplished through beneficiary payments and the establishment of trust shares.
Termination of the Trust: The trust can be ended after the replacement administrator has finished transfers of the trust assets in line with the provisions of the living trust. The replacement administrator is not obliged to submit a final report with the estate court, unlike in the succession procedure. However, the new administrator should provide a final report to the trust recipients to demonstrate that the trust assets were dispersed correctly.
Many living trusts have trust shares that continue to provide for partners, children, and others after the grantor’s passing. If this is the case, the trust will not be terminated at the moment of the grantor’s demise. Rather, the closure will take place in line with the terms of the trust shares. For example, the trust could last until the demise of a partner or until the children achieve a certain age.
