Trust Administration in Sacramento, Ca
Drafting a proper estate plan, including a revocable trust, is the first important step in the estate planning process. The next step is administering the revocable trust that your loved one established. Here is a list of steps that are typically when someone passes away, and a trust has to be administered.
Notifying Heirs and Beneficiaries.
Upon the trust maker’s death, the revocable trust becomes irrevocable, and the person managing the trust (called a trustee) has to send out a trustee notification form to the heirs and beneficiaries informing them of the trust maker’s passing. Once the trustee notification has been sent out, the heirs and beneficiaries have 4 months to contest the validity of the trust.
Obtaining an EIN.
Often, a tax identification number (called an EIN) will have to be obtained to re-title trust accounts in the now irrevocable trust. An EIN number will also be needed if the trust has to file its own income tax return.
The Trustee is responsible for gathering all of the assets that belonged to the person who passed away, and making sure everything that should be in the trust is actually in the name of the trust. However, problems can arise if an asset such a home should be in the revocable trust, but a deed was never executed transferring the asset into the trust.
Transferring Assets to Trust.
Luckily, even if an asset such as a home was never properly titled in the name of the trust, solutions like the Heggstad petition exist, to put the into the trust without having to go through probate. The success of a Heggstad petition depends on a number of factors. Read our article on Heggstad Petitions to learn more and contact us.
Appraisals are important to determine what amounts each beneficiary should receive, and also for documenting the income tax basis. Real property, for example, receives what is called a “step up in basis” upon the death of the trust maker, and the new tax basis will be the value of the property as of the trust maker’s death. You will want to get a date of death appraisal to document the new income tax basis.
Notices and Forms to Assessor’s Office.
Various forms have to be submitted to the assessor’s office when a person passes away, including the “Death Statement” and the “Parent Child Exclusion Form” Our office will help you with preparing and submitting the forms, so property taxes do not go up, and the assessor does not issue any fines.
The trustee will have to review the trust maker’s debts, assess their validity, and pay any debts, as appropriate.
Distributing Trust Assets.
The last stage in a trust administration is the distribution of trust assets. Our firm regularly prepares a trust distribution agreement to outline exactly who is getting what and make sure everyone is on the same page.