Advantages of Trust Administration - Los Angeles and Santa Clarita Estate Planning, Living Trusts, and Probate Attorney Robert Mansour

Advantages of Trust Administration

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Trust Administration enjoys many advantages over the cumbersome, bureaucratic Probate process.

This article will address only the advantages of Trust Administration as a process, not the benefits of a Living Trust. These additional benefits of a Living Trust are far more numerous, and are discussed in greater detail in other articles we have written.

(1) Reduced Cost- The average fee for Trust Administration is in the range of 1-2% of Trust Assets, often a savings of thousands of dollars over the probate fee.

(2) Time - Since Trust Administration generally isn't subject to the Probate Court's calendar, the entireprocess can be handled much more expeditiously. In California, simple trust administrations can often be completed in 6-9 months, versus the 9-18 months typically seen in probates.

(3) Privacy - Whereas Probate is a public procedure, Trust Administration is a private procedure. Documents which are not filed in Probate Court remain private documents, and are not subject to general public scrutiny. Under California Law, the only people entitled to see a copy of your Trust a people named in it, and your heirs at law.

(4) Greater Control & Flexibility over Distributions – Unlike Probate, where a Judge must approve early distributions, the Trust Administration process allows for immediate payment of debts and expenses, funeral costs, and can get money in the hands of the beneficiaries immediately.

Work to be Done during Trust Administration

One of the most common mistakes that a family can make is when a family member or loved one passes away, leaving a Living Trust behind, and the survivors think that no work needs to be done because Probate has been avoided.

While a properly funded Living Trust may allow a Decedent's estate to avoid a formal Probate proceeding, it does NOT allow the survivors to ignore the Estate Administration process altogether.

While court supervision may often be avoided, certain key steps must still be taken, including:

(1) Notification of all Creditors (or Potential Creditors) who are Known or Unknown

(2) Notification of all Beneficiaries named in the Trust Instrument

(3) Payment of all Taxes, Debts and Expenses of the Estate

(4) Distribution of all Estate Assets according to the provisions of the Trust Instrument

(5) In the case of an A-B Trust: Division of the Living Trust into Survivor's and Credit Shelter trusts.

Ignoring these steps may have negative legal and tax consequences on the estate of the decedent.

While these steps appear similar to the procedures that you would encounter in a formal Probate proceeding, the key distinction is that the Trust Administration process is relatively informal, and can often be handled by an Estate Planning Attorney in much less time – and at a fraction of the cost – of a formal probate proceeding.

Conclusion

While the Trust Administration process is substantially cheaper and less bureaucratic than the Probate process, it doesn't relieve family members of their obligation to ensure that their loved one's Trust has been properly administered.

Seeking legal representation is one of the most effective ways to ensure that all of the obligations of the law have been satisfied, and that the entire process is handled in an efficient a manner as possible.

Article Source: http://www.freeforallarticles.com

About the Author John Erik Fraker, attorney and founding partner in the Law Firm of Ainer and Fraker, LLP, is committed to helping people fulfill their estate planning goals through education, research, and implementation. Mr. Fraker is a graduate of the University of California at Berkeley and of the University of Southern California Gould School of Law (J.D.). For additional information, visit www.ainerfraker.com