TRUST ADMINISTRATION

Trusts are often properly recommended as a way to avoid probate proceedings (and much of the cost and delay probate entails). A main benefit of trusts is that, unlike wills, they are generally administered without probate court involvement. But administering a trust is far from hassle-free.

Trust administration is relatively simple when the persons who created the trust (the “grantor(s)”) are all alive and still administering the trust (as “trustee(s)”). But upon the death or incapacity of a grantor, the duties of a remaining or successor trustee can be very complicated. These duties, under the trust and state law, are very serious: a trustee who fails to properly perform them can be held personally liable for breach of fiduciary duty.

Successor trustee duties include (but are not limited to) the following:

• Notice to Beneficiaries. If a trust becomes irrevocable in whole or in part at a settlor’s death, the decedent’s heirs and trust beneficiaries must be notified of that fact and given an opportunity to request copies of the trust.
• Accounting. Trust beneficiaries have the right to a proper accounting of the trust, although such an accounting is generally not supervised by a probate court.
• Inventory and Appraisal. An inventory and appraisal is essential for protecting and preserving trust assets, and for properly accounting for and distributing those assets.
• Creating and Administering any Sub-trusts. Many trusts must be split into certain sub-trusts upon a grantor’s death.
• Decedent Income Taxes. Personal returns must be filed for the decedent.
• Fiduciary Income Taxes. If some or all of a trust becomes irrevocable (as is usually the case with a “bypass” or “credit shelter” trust), then the successor trustee must generally file fiduciary income tax returns.
• Estate Taxes. If a taxable estate is worth more than $5 million (for deaths in 2011 or 2012), a federal estate tax return must be filed.

Contact one of our trust administration attorneys to learn more about the trust administration process and how we can assist the trustee to ensure proper trust administration.

TRUST LITIGATION

We have substantial experience in trust litigation, including representing trustees and beneficiaries. Trusts are often the subject of disputes, which can result in litigation. As in the case of an heir disappointed by the terms of a will, someone disappointed by the distribution provisions of a trust may contest its validity. In addition, beneficiaries may challenge a trustee’s conduct, on such grounds as improper management, failure to honor a trust’s terms, or failure to properly account to the beneficiaries.

Litigation over trusts can involve disputes over various issues, including:

• trust contests based on, e.g., lack of capacity, undue influence, fraud, duress, coercion, lack of proper formalities, or bequests to disqualified beneficiaries (including caregivers and attorneys);
• beneficiary claims;
• accounting by trustee;
• breach of fiduciary duty;
• trust mismanagement; and
• trust misappropriation.

Contact one of our trust litigation attorneys to discuss your claim involving a decedent's estate.