TRUST ADMINISTRATION

If a loved one established a trust, it must be properly managed and distributed according to its terms and state law upon certain events occurring, typically upon the death of the person who established the trust. Trust administration involves the responsibilities of gathering assets, managing those assets, and subsequently distributing those assets according to the rules established in the trust agreement. Only assets owned in the trust’s name, or that name the trust as a beneficiary, are governed under the terms of the trust.

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Some of the typical steps involved in administering a trust include:

• Reviewing and understanding the trust instrument

• Identifying the trustee’s authority

• Notifying beneficiaries and any other interested parties

• Marshalling and valuing the trust’s assets

• Obtaining a federal tax identification number for the trust, if necessary

• Paying debts, expenses, and/or taxes of the trust or the person who passed away

  • In Pennsylvania, be aware that PA Inheritance Tax is often owed

• Keeping accurate records and providing accountings of the trust’s assets and liabilities

• Making distributions to the appropriate beneficiaries

• Winding down the trust to formally close the trust