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The primary responsibility of a successor trustee is allocating the assets from the original trust to the proper beneficiaries. Prior to this happening, there are a few steps that are required to be followed.

First, within 60 days of the date of death (or within 60 days of the second spouse’s death if the trust is in relation to a couple), all beneficiaries of the trust and heirs at law must be informed in writing. This notification has specific wording and, if any of the trust beneficiaries demands it, a copy of the trust along with all of its amendments are required to be be provided to them. Any person who receives this notice has 120 days to dispute the original trust.

The assets in the original trust can be sold. Or, if all of persons agree, the assets can be evenly split among them. For example, a beneficiary may want the property while another may want an equally valued mutual fund. If, however, an agreement cannot be reached among all parties, the assets of the trust will be equally divided, with each individual beneficiary receiving their equal share of each individual asset from the trust.

A exact list of all the trust assets must be shaped once an agreement has been reached by all beneficiaries with regard to the division of trust assets. After this list has been agreed to and signed by all parties, the assets must be re-registered in the names of the beneficiaries who will take delivery of them. Additionally, each financial institution that holds title to these assets must be notified of the re-registration. For real estate, a new deed must be created for each parcel of property.

Additionally, an annual accounting of the trust must be filed with all of the beneficiaries, as well as upon a change of trustee or thetermination of a trust. This accounting must show which assets were held in the trust at the date of death, as well as the value of the assets on the date of death and their current market values.

Some trust stipulate that the trustee may not allocate the assets for a set number of years. In cases such as this, the successor trustee will be responsible for investing the trust assets and making distributions to beneficiaries in the future. In any case, a successor trustee has a fiduciary responsibility to manage the trust solely for the benefit of the trust beneficiaries. This means the originators of the trust, if alive but incapacitated, and for the designated beneficiaries upon the trust originators’ deaths.

It is recommended to hire an estate planning attorney during this process. The recommendations you receive can help that you are following the process in the proper manner. With the many steps involved that pertain to asset distribution, it is a good idea to work with someone who understands the process.

Tags: Amendments, Annual Accounting, Beneficiary, Current Market, Equal Share, Financial Institution, Heirs At Law, Market Values, Mutual Fund, real estate, Regard, Successor Trustee, trust, Trust Accounting, trust assets, Trust Beneficiaries, Wills