What is trust administration? Trust administration is the work a trustee does on behalf of the trust to meet its purpose. For example, when a trustee uses trust assets and pays the bills of the Settlor (the person who created the trust) because the settlor is incapacitated, the trust is being administered. Trust administration is not only the day to day obligations of the trust, but also includes special duties and notices, which likely vary from state to state.
Many trusts do not require court oversight, and that often leads lay people to believe they do not need to see a lawyer or seek out legal services for a trust. A trust is a legal document, and it is in the best interest of any trustee to understand their legal obligations and responsibilities under that document. The actions of a Trustee may be subject to Court review for a variety of reasons. A trustee cannot allege ignorance of the law and the legal responsibilities created in the trust document, if they fail to act in a responsible or prudent manner.
Does this mean only lawyers can be trustees? No, of course not. A well-written trust should be easily administered by anyone. However, most people find that, at a minimum, an initial consult with a lawyer to give them advice and so they may understand their obligations as Trustee. Oftentimes, with a simple consult, many problems can be avoided in Trust Administration. Also, it is smart to form a relationship with a lawyer so you can receive advice about trust options, and feel confident as you administer a trust.
Having someone ask you to serve as Trustee of their trust is an honor….but it is also an obligation, which comes with legal responsibilities. Make sure you understand those obligations and ask for a legal consult today!