The BIG Question If You’re A Successor Trustee… Do You Need Help?

Edited by Bob Brumfield

Assessing Your Family’s Capability to Manage Your Trust Settlement

Settling the estate of a loved one through a revocable living trust can be an intimidating process. This is why it’s important to consider if your family has the capacity and resources to handle this task without assistance from an attorney or other legal expert. Here are some key factors that will help you determine if additional guidance may be necessary for settling your trust successfully.

Complete Funding of the Revocable Living Trust: What It Means and Its Benefits

To ensure that a revocable living trust works as desired upon the Trustmaker’s passing, it is essential to fully fund and update the trust prior to their death. This includes including all assets of value in the revocable living trust; any remaining individual property may necessitate probate administration after their demise. If complete assurance of avoiding an estate probate is sought, then comprehensive funding and updating must be completed beforehand by the Trustmaker for successful execution post-mortem.

Effects of Marriage on Trust Creation: Understanding the Trustmaker’s Situation

If your loved one has passed away and left behind a revocable living trust with AB or ABC planning, it is critical to meet with an estates and trusts attorney. Doing so will ensure all A, B, and/or C trusts are properly funded as well as any necessary estate tax return filings at the federal or state level. Furthermore, when the surviving spouse passes on their assets must be unraveled from these complex trusts in addition to settling final affairs of both spouses’ (revocable) living trust(s).

Outright Inheritance vs. Inheriting through a Trust: Factors to Consider for Beneficiaries

If the beneficiaries are not required to go through complex processes such as paying estate taxes, dealing with debt, or assigned trusts for inheritance purposes then they may be able to settle their affairs without professional legal help. However if some individuals require trust-funded inheritances then a lawyer should be consulted in order to ensure that all tax returns and daily transactions related to those trusts remain compliant.

Assessing Estate Tax and Inheritance Tax Obligations: What to Do When the Estate Owes Federal or State Taxes

State estate and/or inheritance taxes may vary depending on where the Trustmaker lived or owned real estate. As such, to protect distributions for beneficiaries of the trust assets, a successor trustee must work with an estates and trusts attorney prior to releasing funds in order to ensure any applicable returns are filed as well as all due taxes paid after which point distributions should be made from trust assets only. Otherwise, unpaid tax liabilities can become personally liable by those distributing under their own authority.

Business Ownership and Trust Creation

Following the death of a Trustmaker, an estate and trust attorney must be consulted by the successor trustee to carry out any pre-existing exit plan. If no such arrangements have been made, however, it is essential for legal guidance in navigating either carrying on with operations at hand or transferring ownership through sale or closure of the business.

Anticipating Beneficiary Conflict

Although a revocable living trust can provide sound financial planning, deep-seated family discord between beneficiaries could still lead to disputes over its administration. If such disagreements arise, the successor trustee may need legal help from an estates and trusts attorney while individual trustees should consider seeking representation of their own interests in order to protect them during settlement proceedings.

Trust as a Beneficiary of Retirement Account

When establishing trusts for a surviving spouse or other beneficiary, it is essential to enlist the help of an estates and trust attorney. These professionals can ensure that retirement account assets are seamlessly transferred into applicable trusts while avoiding costly tax consequences down the line.

Individual Beneficiaries of Retirement Accounts

Planning ahead with the assistance of an estate and trust attorney can make a crucial difference in protecting your loved one’s retirement assets. If proper steps are not taken, even if the trust is named primary beneficiary, there may be adverse income tax and distribution consequences after death. Don’t take unnecessary chances; ensure that all efforts have been made to secure these assets for future generations without having to go through probate court.

About the author

Bob Brumfield

Attorney Bob Brumfield has been practicing law since 1984 and regularly receives the “Top Lawyers in California” award as well as the “Client Distinction” and “Client Champion” awards from Martindale-Hubbell.

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