Many people believe that once a trust has been created, it will simply go into effect “automatically” when the grantor (the person on whose behalf the trust was created) passes away. This is not the case. A trust must be administered for it to carry out the grantor’s wishes. At Biddinger, Schrot & Rolando, PC, we frequently administer trusts for our clients, even those who did not hire us to create the trust initially.
Responsibilities of the Trustee
The person responsible for administering a trust is called the trustee. The trustee is responsible for following the instructions outlined in the trust by the grantor, as well as for adhering to Michigan laws governing trusts. The trustee must take over the management of trust assets immediately upon the death of the grantor and handle the trust administration process from start to finish.
What is involved in administering a trust? Typically, it requires all of the following:
- Provide notice to creditors and trust beneficiaries
- Keep an accurate accounting of trust property and income
- Make payments as required out of trust assets
- File federal and state tax returns, and pay any taxes that are due
- Manage the legal transfer of trust assets to their new owners in accordance with mandates in the trust
- Provide a complete and accurate accounting to heirs
Administering a trust can be complicated and time-consuming in and of itself. When you factor in the grief that comes from losing a loved one, the process can seem overwhelming. In addition, a trustee can be held financially and legally responsible for administering a trust improperly, even if errors were made inadvertently.
If you have been asked to serve as trustee, we can help you navigate the process every step of the way. If you would rather not take on the responsibility of trustee yourself, we can help you find the ideal person or company to handle the process for you. We invite you to contact us to schedule a consultation with one of our Michigan trust administration attorneys. We welcome the opportunity to meet you in person.