(The Nuts and Bolts of Administering a Trust for the First-Time Trustee)
CHAPTER SUMMARY
The chapters are organized to initiate the trustee as painlessly as possible into the administration of the trust, and then lead them through the logical progression of tasks they must accomplish before making the final distribution of the trust estate to the beneficiaries.
Chapter 1 - Getting Started - describes the initial tasks a trustee should accomplish. In other words, all those things that a trustee unfamiliar with the trust administration process won't even know they need to do, much less how to do them. It acquaints the trustee with the specific information to look for in the will and the trust and why that information is important in the overall administration of the trust. There are detailed instructions regarding how and where to order death certificates, what to do about the decedent's bills, how to apply for a tax identification number for the trust, what notices must be sent and to whom, and what documents the accountant will need to prepare the tax returns for the decedent and the trust. Sample letters and forms for each of these tasks are provided in the Appendix. To be sure that the trustee is aware of specific duties that are required of a trustee under California law, a list of those duties is provided before the administration is too far along. Also, since a common question for a trustee to ask is "Is this worth my time?" or "How much will I be paid as trustee?" this chapter provides information regarding the amount of compensation to which a trustee is entitled.
Chapter 2 - How to Prepare an Inventory of Trust Assets - provides a road map for the trustee through the confusing process of identifying the decedent's assets and accurately valuing them as of the date of the decedent's death. This includes not only real property, but mobile homes, bank accounts, and various securities and investments. In addition, it describes in detail how to obtain the value of specific items of personal property of the decedent, such as coins, stamps, jewelry, vehicles, farm equipment, art and antiques.
Chapter 3 - Taking Control of the Decedent's Assets That are Held in the Trust - provides instructions for transferring the different types of assets of the trust into his or her name as successor trustee and explains what forms are necessary for the trustee to execute for the transfers.
Chapter 4 - Taking Control of the Decedent's Assets That are Held Outside of the Trust - gives the trustee options for taking control of the decedent's assets that were held outside of the trust at the time of death. This chapter describes the circumstances under which specific types of assets can be claimed for the trust by using an affidavit of death of joint tenant, a small estates petition, or one of the small estates affidavits.
Chapter 5 - Recordkeeping and Accounting - explains in detail how to record deposits, disbursements , dividend reinvestments of stock, as well as donations and sales of assets so that when it comes time to prepare the necessary accounting the information is readily available. This chapter also provides complete instructions on drafting an account and report of trustee, and preparing the supporting accounting schedules of receipts, other charges, gains on sales, disbursements, losses on sales, other credits, etc. It also takes the trustee through the steps of reconciling an account, because accounts almost never balance on the first try.
Chapter 6 - Disposal and Distribution of Assets - outlines the steps necessary for disposing of assets and making distributions to the trust beneficiaries. It spells out how to calculate the distribution so that it is done according to the terms of the trust and addresses the correct way to transfer real property, mobile homes, investments and, of course, cash to the beneficiaries.
Chapter 7 - Winding Up the Trust - advises the trustee of things to consider before distributing the trust cash reserve so they don't end up having to pay expenses out of their own pocket. It's almost impossible to convince a beneficiary to give back a portion of their inheritance to reimburse expenses discovered after the final distribution has been made. If a final distribution to the beneficiaries is advisable, this chapter explains what information to provide with the final check, how to close the bank account, and what to do with the documents accumulated during the trust administration.
The Appendix includes more than 40 annotated sample forms to assist the trustee in preparing the forms needed during the administration of the trust. People who are unfamiliar with official forms often have great difficulty in deciphering what information to put into the forms. The samples demystify forms that otherwise appear extremely complicated.
The Glossary takes the mystery out of unfamiliar words that are commonly used in the administration of trusts and gently educate the reader.