TRUST ADMINISTRATION

As a complement to our San Diego, California tax law practice, our firm represents trustees, successor trustees and beneficiaries with complex trust administration matters including the preparation of IRS Tax Form 706, Federal Estate Tax Return. Most successor trustees find they need help when faced with the serious fiduciary responsibilities involved with California trust administration of living trusts. This is especially true for complex living trust estates that include real property, stock portfolios, powers of appointment, life insurance and business ownership.

Some people believe that having a living trust avoids probate and magically whisks away all of the tasks required to administer a living trust estate. Not true. One of the few things I remember from my marketing class at the University of Akron years ago is that you can cut out the middleman but you cannot cut out their function. So, while a living trust may avoid probate, a living trust does not eliminate the functions of the Probate Court process. A successor trustee or co-trustees of a living trust must assume the role of the Probate Court and must:

1. ASSETS Marshall and inventory all assets of the trust estate as well as any assets outside the trust estate. Presumably the successor trustee is also the executor of the decedent’s pour-over will. Any assets that were not properly funded into the living trust during the decedent’s lifetime may have to be probated in the proper California Probate Court.

2. DEBTS The successor trustee must identify all creditors and pay all of debts of the decedent’s trust estate including last illness and funeral expenses.

3. TAXES In our experience, most successor trustees retain a CPA to prepare the decedent’s final income tax return (IRS Form 1040), fiduciary trust tax return (IRS Form 1041) and, if necessary, federal estate tax returns and/or federal gift tax returns (IRS Forms 706 and 709).

4. DISTRIBUTION After the debts and taxes of the trust estate have been paid, the successor trustee may distribute the remaining trust assets to the beneficiaries of the living trust. In some cases the successor trustee may make preliminary distributions to the living trust beneficiaries before the conclusion of the living trust administration.

We use our knowledge of California probate law, federal estate and gift tax law, common sense, and practical experience to deliver maximum distributions to the settlor’s intended beneficiaries while paying the least amount of tax.

Every case in my office receives my personal attention, direction and supervision. I will investigate, develop and serve as the trial lawyer responsible for your case. You will speak to me directly about your case. I am the one who will return your telephone calls. Our firm policy is to return every client telephone call the same day or at the latest the next day.

For more information, please see:

FAQ's: Frequently Asked Questions About Living Trusts, Wills, Probate & Estate Plans

New clients are always welcome; please call us at (858) 793-7007 for an appointment.  We also handle business law and tax emergencies; if your problems are urgent, we will make every effort to fit you in immediately.