A Firm Assisting Clients With All Aspects Of Trust Creation And Administration
Trusts are an important and powerful legal instrument used in estate planning. They allow someone to set aside assets for named beneficiaries while giving the creator considerable control over how, when and for what purpose the assets can be used. Unfortunately, many people have little to no idea what trusts do or how they work.
On this page, we’ve provided a basic overview of trust administration. This will hopefully be helpful to you whether you are considering creating a trust, have been named as a successor trustee or a beneficiary. If you have additional questions after reading, we invite you to contact our attorneys at Jurist Law Group, PLLC, to discuss them during an initial consultation.
Defining Roles: Settlors, Trustees And Beneficiaries
The person who creates a trust is called the settlor, which is synonymous or also referred to as the grantor, trustor, or trustmaker. When a trust is created, a person or firm is appointed to hold and administer certain property and assets on behalf of the settlor, and this person is known as the trustee. A trustee has the fiduciary duty to act in the best interests of the trust’s beneficiaries – individuals for whom the trust assets are intended – and of the assets held within the trust. Trust administration is a significant responsibility. It concerns the management and distribution of the property and assets held in a trust. To help with proper administration, there are several protocols set in place to ensure that the trust is effectively managed.
The Rights And Duties Of Irrevocable Trust Beneficiaries
If a trust becomes irrevocable at any time, the beneficiaries of the trust are required to receive notice of the trust agreement. As soon as the notice is received, the beneficiaries have a certain number of days to file a trust contest if they wish to dispute the trust. If a beneficiary wishes to contest a trust but fails to file their petition, they may lose that opportunity altogether. In Arkansas, beneficiaries have 90 days from the notice to file a contest with the court.
Passing Responsibility To A Successor Trustee
A settlor is usually the trustee in a revocable living trust while alive. As the trustee and creator, they can move assets in and out of the living trust. When the settlor passes away, the successor trustee named in the trust takes over the administration of the trust.
If real property is being held in a living trust, the property’s legal title is vested in the trustee while the property’s equitable title is vested in the beneficiaries. If a trustee becomes incapacitated, dies, or for whatever reason is unable or unwilling to continue to serve as trustee, legal title will vest in a successor trustee. Conferring legal title of a property to the successor trustee occurs automatically upon acceptance of appointment as successor trustee. The successor trustee is conferred all the same rights and powers of an initial trustee.
After handling matters with any real property found in the trust, the successor trustee is also responsible for the care of other assets held in the trust. Other assets can include investment and bank accounts. In addition to assets, the successor trustee is in charge of paying, satisfying, and filing the settlor’s outstanding debts, liabilities, and applicable taxes. These all must be resolved before the beneficiaries receive any remaining assets upon the death of the settlor.
Once all of the settlor’s affairs have been settled. The beneficiaries of the trust can collect what remains in the trust. The trust will detail how the assets will be distributed or dispersed among the beneficiaries.
Trusts Are Complex, But We Are Here To Help – Reach Out Today
Ensuring that a trust is set up and administered appropriately should be done with an estate law attorney like those at our firm, since the process can be complicated. Contact us today to learn more about creating or administering a trust, or about your options as a beneficiary. We serve clients in and around Little Rock, Arkansas. To get started, call 501-400-7355 or submit an online contact form.