What is trust administration? What is a Trustee or Successor Trustee?
Trust administration involves overseeing and properly managing the assets held within a Trust. Trust administration usually takes place upon the death of the trust creator. A trust is a form of legal property ownership. A trust may hold title to real property, such as real estate, or to financial assets, such as brokerage and bank accounts, etc. Trusts are commonly created as an estate planning tool, to avoid probate upon the death of the trust creator.
When a trust is created, in addition to naming the beneficiary, a trustee & successor trustee must also be named. The trustee is usually the creator. The trustee or successor trustee is responsible for protecting the assets in the trust and ensuring they are used according to the wishes of the individual who established the trust. A Successor Trustee is also named to take over trust administration duties when the trust creator becomes incapacitated or dies.
The trust administrator, also known as successor trustee, oversees the distribution of trust assets to the designated trust beneficiaries named in the trust according to the instructions of its creator upon his death.
The beneficiary of the trust receives the trust assets without going through probate upon the completion of the trust administration.
Types of trusts; There are Special Needs Trusts for people with special needs. Revocable Living Trusts are most common. Life Insurance trusts.
The duties involved in trust administration vary depending on the nature of the trust created. The trustee has a fiduciary duty when performing the trust administration. This means he owes the highest obligation to protect the assets in the trust and the interests of the beneficiaries. He cannot divert assets, or comingle assets from the trust into his own name, put the assets at risk in any way or otherwise behave in such a manner that interferes with the purpose of the trust as determined by the trust's creator.
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