Trusts in Houston, Texas

Trusts

Trusts

What do you do now?

What do you do now?

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How is Trust Administration Different than Probate?

If the decedent had a will, then probate is required.

If there’s an attorney-advised trust with them in it instead of regular administration through Court proceedings which can take months and cost you money (lots), we’ll handle all that for you!

For more information about the advantages of trusts versus wills, contact us today.

What is Trust Administration?

The death of a loved one can be an emotional time for families. Trusts are used to help protect assets and provide peace-of mind, but what happens after the person who created it passes away? To answer this question we must first understand how trusts work.

The following are common misconceptions about how trusts work.

  1. Trusts don’t need any further attention and can be left alone after someone has passed on – this might not always happen as expected because issues with the trust itself may surface or the administration of the trust could result in court action if left unattended for long periods of time;
  2. Many people think an attorney will only get involved when something goes wrong (i e , missed deadlines), but you should discuss your options before hiring an attorney so he/she knows exactly what his role entails from start to finish.

One of the most frequent misunderstandings happens when there is a joint trust between husband and wife. The law calls for them to be split into sub-trusts (most commonly survivor’s or bypass), which can help with estate tax savings; asset protection for surviving spouse if they’re left alive after their partner dies intestate according divorce laws.

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What might happen during trust administration?

There are many other things that can happen in a trust administration.

Some of these things could include:

  1. Notifying trust beneficiaries and heirs at law of the death of the Grantor
  2. Obtaining an IRS Tax ID Number(s) for the trust and/or sub-trusts
  3. Filing a final income tax return for the decedent
  4. Filing a death tax return
  5. Filing a trust income tax return annually for as long as the trust is held open
  6. Publishing a legal notice in a local newspaper regarding the death of the Grantor of the trust
  7. Marshalling all of the assets together and protecting the trust assets
  8. Depositing the decedent’s Will with the County Clerk of the Court
  9. Opening a bank account for the trust
  10. Paying financial and last expenses of the decedent
  11. Collecting life insurance policy proceeds
  12. Determining if a formal probate needs to be opened with the court for any assets not titled in the trust
  13. Notifying all banks and financial institutions of the death and that they are the nominated Successor Trustee
  14. Notifying the V.A. (if applicable) and Department of Health Services of the death
  15. Determining Beneficiary status of all the decedent’s retirement accounts. For most 401Ks and IRAs, a stretch out is available for the beneficiary if the proper steps are taken
  16. Obtaining valuations on all property as of the date of death of the decedent including real estate and business interests
  17. Determining if an estate tax is due at the federal or state level on the decedent’s Estate
  18. Paying off all of the debts of the Grantor of the trust from the assets of the trust
  19. Paying ongoing expenses of trust administration such as legal and CPA expenses, etc.
  20. Liquidating assets where necessary to pay off the debts of the Grantor
  21. Investing assets of the trust in a safe and prudent manner during trust administration
  22. Distributing the trust assets to the beneficiaries after all of the above has been completed.

There are a variety of tasks that need to be analyzed and dealt with in an estate. The list above is not exhaustive!

The best way to avoid costly and stressful liability claims from your beneficiaries is by hiring an experienced trust attorney in the administration of any new or existing trusts. This will help shield you against expensive legal issues that could arise.

What Do I Do First?

It takes about two weeks to receive the death certificates, but don’t wait until it’s too late! Call our office three weeks out to make sure there are no issues with getting one quickly.

Meanwhile, there are some steps you should take before your first appointment:

  • If the residence is empty, consider changing the locks if there might have been caregivers or family members with a key.
  • Contact the insurance company to be sure the homeowner’s insurance policy is in place.
  • If there is an alarm company, contact them to register your name and contact information.

Contact all of the decedent’s financial accounts to freeze the accounts until after you meet with the attorney.

What are My Responsibilities?

We have a complete checklist of tasks to be performed by you. Here is a summary:

  • Identify the assets of the estate.
  • Preserve the assets from harm.
  • Identify and pay the legitimate debts of the decedent.
  • Identify and distribute the gifts of personal and real property as specified in the trust.
  • Distribute any cash gifts as specified in the trust.
  • Sell any real property not to be distributed to the beneficiaries.
  • Sell or dispose of the remaining personal property of the decedent.
  • Pay the final distribution to the beneficiaries named in the trust.
  • Keep the beneficiaries informed at all times as to the progress of the trust administration.
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What does it Cost?

The cost of trust administration is significantly lower than probate. Our services are available by the hour at our standard rates. But we can also propose a flat fee so that the legal fees will be fixed for the administration process, unless a dispute arises by a creditor or a beneficiary.

What if I have Questions?

We welcome your questions and are here to guide you through the process each step of the way.

What if I Have Funeral and Other Immediate Expenses?

The costs for closing on a trust may be more than what you were expecting. Our team will work with your bank and other financial institutions to make sure that the funds are transferred in time, but if this isn’t possible it may be necessary to advance funeral expenses yourself and receive future reimbursement.