Trusts

Trust administration is one of the oldest area of laws in the United States. Whether you live in Columbia, Maryland or Ellicott City, trusts can be used for a wide variety of purposes. For the most part, trusts are divided into two large categories: revocable and irrevocable. Both types of trusts are commonly created by estate planning attorneys and have advantages over wills in that they avoid or minimize the size of the estate for probate (and help to avoid the estate tax).

But, how are trusts administered? It's actually done similarly to the way wills are administered.

For many clients, a trust is the optimal choice for administering an estate. Some wealthy clients need trusts known as irrevocable trusts in order to avoid the estate tax or to protect assets from creditors. Others will use trusts to avoid probate. The mechanisms of trust administration are similar to the mechanisms of administering a will, but there are some notable differences that clients need to be aware of.

Probably the biggest difficulty in being a trustee is seeing that the property meant to be inside the trust has been correctly retitled.

I’ve written on the importance of a trust administration lawyer before, here, and I am going to touch on the process again. Trust administration is becoming more and more of an issue for Americans because of the growing popularity of revocable living trusts. While I believe that revocable living trusts are unnecessary for most people, if a trustee has been chosen to administer a trust, he or she must face a task that can be even more daunting than a probate. That means trustees may need the assistance of an attorney.

Trust administration is not overseen by courts in the same way that probate is.

Choosing an attorney is like choosing any service provider. Various factors need to be taken into account before making a decision, including cost, reputation, and even likability of the provider. Lawyers are licensed service providers who generally work hard to provide the best service possible.

Your will is a vital part of the organization of your estate. While writing your own will is perfectly legal, it’s generally not a good idea: having a wills attorney draft it for you is the best course of action.

You might have heard that the terms “irrevocable” and “revocable” with regard to trusts. Lawyers and people who have created an estate plan like to throw these terms around, but they are often misused by both parties. They also can be manipulated by lawyers to confuse clients into purchasing something that is expensive and unnecessary.

“Revocable” generally refers to a revocable living trust. A revocable living trust is a trust that is used to avoid probate, or at least to minimize how much of an estate is exposed to probate administration.

Trust administration is a very important role for a person to take on. Being the trustee means holding on to the assets of someone else (usually) and distributing them to others (the trust’s beneficiaries). A trustee is someone who has been entrusted by a grantor to take care of these assets and to give them away under certain conditions that have been spelled out in the trust documents. You can see that the root word for trustee is “trust,” and there certainly is an element of trust in such an important role.

A trustee should be someone who is organized and good with money.