When a trust is created, a person or firm is appointed to hold and administer certain property and assets on behalf of the trust creator, otherwise known as a testator. The person who is assigned to the trust is known as the trustee. A trustee has the fiduciary duty to act in the best interests of the trust’s beneficiaries and the assets held within the trust. It is worth noting that the person who creates the trust is known as the settlor. 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.
Trust administration is a significant responsibility. It concerns the management and distribution of the property and assets held in a trust. As mentioned, the trustee has a strict fiduciary duty to uphold the terms of the trust they are appointed to. To help with proper administration, there are several protocols set in place to ensure that the trust is effectively managed.
Once a trust is established, the beneficiaries and heirs of the trust are sent a notice. The notice is mandatory. 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 60 days from the notice to file a contest with the court. If the contest is successful, the trust will be deemed invalid.
If real property is being held in a living trust, the property’s title is transferred to the successor trustee after the settlor passes away. Conferring the title of a property to the successor trustee enables the property to be handled the way the settlor wanted. When a certified copy of the death certificate gets recorded with an affidavit, the property’s title could be transferred to the new owners of the real property. Ensuring that a trust is set up appropriately should be done with an estate planning attorney since the process can be complicated. An estate attorney will know how to prepare the documents and make certain that the assets in the trust are protected and secure.
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.
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.
It is recommended to work with an attorney in Little Rock, AR to help create and facilitate a suitable trust for your estate planning needs.
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