Trust Administration Summary
When a couple establishes a living trust, they usually
establish themselves up as its initial trustees, and
begin to register assets in the name of the trust. When
the first spouse dies, the trust is commonly split into
two subtrusts, Trust A and Trust B, with the surviving
spouse usually the trustee of each.
Trust A is a revocable
trust, like the original living
trust was, and contains the surviving spouse's assets. Trust
B contains the maximum amount allowable as exempt by federal
estate law, or the total assets owned by the first spouse who
died. Unlike Trust A, Trust B is irrevocable.
When the surviving spouse dies, the various trusts need to be
carefully administered. The trustee
or trustees of these trusts have many legal responsibilities
when distributing the assets of these trusts, and litigation
can result if these responsibilities are not properly followed.
The trustee or trustees may be personally held liable for damages
by the trust's beneficiaries, and the IRS may get involved and
attack the trust.
Because of these very real possibilities, any person
who acts as trustee or co-trustee for any of these trusts
should retain an estate planning attorney and a qualified
accountant before doing anything. The trustee needs
the advice and experience of someone who is familiar
with the law and the administration and handling of
trusts in California as an advisor, and that advisor
should be impartial.
While these pages attempt to inform you about how a living trust
is created and disbursed, they are no substitute for the qualified
assistance a tax or legal professional can provide. The person
who becomes the successor
trustee most often receives the trusts when his or her parents
have died. This emotionally trying time may make it difficult
to concentrate, and an experienced advisor may insure that all
the necessary steps are properly done. THE MAMOLA LAW FIRM, APC is conveniently located throughout Orange County. For additional information, please contact us at (949) 333-6543.