Danville Trust Administration Attorney in California

Barr & Douds Attorneys is a trusted law firm in California with a focus on trust administration in Danville. With a wealth of experience and a deep understanding of estate planning, our dedicated team of attorneys provides skilled guidance and assistance in navigating the complexities of trust administration.

Danville Estate and Trust Administration Lawyer in Northern California

Barr & Douds Attorneys is a highly regarded law firm based in Northern California, offering comprehensive estate and trust administration services in Danville and its surrounding areas. With a strong focus on client satisfaction, our team of experienced lawyers provides personalized and strategic guidance throughout the entire administration process. We understand the intricacies involved in managing and distributing assets, ensuring that clients’ estates are handled efficiently and in accordance with their wishes. Whether it’s navigating complex legal requirements, resolving disputes, or minimizing tax implications, Barr & Douds Attorneys offers reliable representation to protect and preserve their clients’ legacies.

What Is Trust Administration?

Trust administration is the process by which assets owned by a decedent’s trust are transferred to the trust beneficiaries upon the decedent’s death. An attorney for beneficiary and trust issues represents both trustees and beneficiaries and specializes in representing trustees dealing with difficult beneficiaries, or beneficiaries who are concerned that their trustee may not be acting appropriately.

If you’ve just become the successor trustee of a trust, you should:

• Understand your fiduciary duties. This is described in more detail below, but briefly – you work for the beneficiaries and must put their interests above your own. You should answer their questions and provide them with information
• Be prepared to account for every penny. Even if the trust says you do not need to account for the beneficiaries, you will probably have to prepare an accounting if a beneficiary asks for one. This means you should never pay in cash, should keep a journal of every debit and credit, and should save every receipt.
• Don’t do it yourself. In addition to administering trusts, we litigate all types of trust and estate disputes. Many of these cases arise because a trustee began the trust administration process without legal advice and made one of the many common mistakes that lead to litigation. If you are a beneficiary and are concerned that your trustee may have breached his or her fiduciary duty, we can help you hold the trustee accountable, or even seek the appointment of a new trustee.

What Are the Responsibilities of a Trust Administrator?

As a trust administrator, you have important responsibilities that revolve around upholding the trust’s integrity and acting in the best interests of the beneficiaries. Here are the key responsibilities of a trust administrator:

• Duty of loyalty: You must always prioritize the best interests of the beneficiaries, as outlined in the trust, making decisions that align with their welfare.
• Duty of disclosure: It is essential to provide complete and timely information to all beneficiaries, keeping them informed about the trust’s status, assets, and any relevant changes.
• Duty of impartiality: Treat all beneficiaries fairly and equally, without favoritism or bias, ensuring that their rights and entitlements are respected and upheld.
• Duty to enforce and defend claims: When reasonable and practical, take necessary actions to enforce claims on behalf of the trust, even if it may result in potential losses.

These duties require a high level of integrity, transparency, and commitment to fulfilling your fiduciary obligations as a trust administrator.

Standards of Trust Management

If you are a trustee, you act in a fiduciary capacity, which means you owe the beneficiaries the highest standard of care under the law, placing their interests ahead of your own. One well-known case described the duty this way:

A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior… the level of conduct for fiduciaries [has] been kept at a level higher than that trodden by the crowd. Meinhard v. Salmon, 164 N.E. 545 (N.Y. 1928).

In managing trust property, you must use at least ordinary business ability; if you have special skills you will be held to a higher standard of care. Your management will be judged in light of the circumstances existing when transactions occur, rather than with the benefit of hindsight. If you abuse your trustee powers, you may be held liable for loss or damage to the trust estate. If you act in bad faith, you could be required to personally reimburse the trust for funds lost or misappropriated, for your legal fees, and even the beneficiaries’ legal fees.

While acting as a trustee, you are subject to the “Prudent Person Rule”:

The trustee shall administer the trust with reasonable care, skill, and caution under the circumstances then prevailing that a prudent person acting in a like capacity would use in the conduct of an enterprise of like character and with like aims to accomplish the purposes of the trust as determined from the trust instrument.

5 Stages of Trust Administration

Our lawyers will guide you through this confusing, tedious, and sometimes even frightening process.

Investing and Managing Trust Assets

A trustee ordinarily has a duty to invest trust property, preserve it, and make it productive. Unless the trust provides otherwise, a trustee must comply with the Uniform Prudent Investor Act, which begins at California Probate Code § 16045 (“UPIA”). A trustee should scrutinize the trust investments to ensure they comply with the UPIA. Even if the trust exempts itself from the UPIA, a trustee should be cautious about violating its provisions. The UPIA, requires trustees to meet the following standard of care:

(a) A trustee shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.

(b) A trustee’s investment and management decisions respecting individual assets and courses of action must be evaluated not in isolation, but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.

In summary, a trustee typically has broad discretion in investing trust assets but must act prudently and in the best interests of the trust. This broad grant of discretion will not shield a trustee from liability if he or she does not exercise these powers reasonably. Therefore, if you question the propriety of any investment, consult with a trust administration attorney before buying or selling.

Tangible Personal Property

Tangible personal property (such as jewelry, furniture, pictures, and other personal belongings) is distributed as provided in the will or trust. If the beneficiaries agree on a division of the tangible personal property, this can usually be handled informally.

If the beneficiaries disagree, tangible personal property should be handled in a more formal manner. Because disputes over tangible personal belongings are as common as they are divisive, a trustee should secure the tangible personal property and control access to the house or other location containing tangible personal property. If an estate tax return is required, any item (or group of items in a single collection) with a fair market value of $3,000 or more must be separately appraised for estate tax purposes.

A trustee should be particularly cautious if the decedent owned any guns. California law requires that most gun transfers occur only after the trustee has ensured that the person receiving the gun is eligible to possess firearms. The transfers should usually occur through a Federal Firearms Licensee.

Accounting and Providing Information to Beneficiaries

A trustee has a duty to make the beneficiaries aware of the existence of the trust, keep them informed of the administration, and respond to their reasonable requests for information. Our trust administration attorneys advise trustees on the specific actions necessary to fulfill these duties.

The duty to account is more onerous – a trustee must account for all trust transactions annually. This requirement can be waived by the trust itself, or by all the beneficiaries in writing. Trust accounting is a unique form of accounting that meets the particular requirements of the Probate Code.

Some trustees prepare an accounting even when an accounting is not required because it gives the beneficiaries a better understanding and appreciation for the complexity of the trustee’s job, helps to avoid misunderstandings by disclosing all transactions, and starts the running of a three-year statute of limitations for all matters disclosed in the accounting.

Although we often recommend formal accountings, if the beneficiaries agree to waive an accounting, we will prepare the appropriate waiver forms.

Tax Issues

A trustee is responsible for filing the settlor’s final income tax return, any unfiled tax returns, fiduciary returns for the trust, and an estate tax return, if required. The trustee is typically responsible for paying any outstanding tax liabilities and may be personally liable for failing to file any unfiled returns or failing to pay tax liabilities. Our attorneys work with the trustee’s CPA and review necessary returns and allocations.

If an estate tax return is required, our lawyers will need to know the fair market value of all assets owned by the settlor or the trust at the time of death. Appraisals may be required for real property, closely held business interests, and tangible personal property.

If the settlor made any gifts during the year of death (or any prior year for which no gift tax return was filed) that exceeded the annual gift tax exclusion, the trustee may also be required to file a gift tax return.

Final state and federal personal income tax returns will be required for the period from January 1 through the date of the settlor’s death. These returns will include income generated by the assets of the trust before the date of death. Income generated by the assets in the trust after death is reportable on the fiduciary returns.

Trusts must file fiduciary income tax returns (state FTB Form 541 and IRS Form 1041) covering the period from the date of death to the final distributions from the trust. The trust’s first taxable year will be a short taxable year commencing with the date of the settlor’s death and ending on December 31, or earlier if the trust administration is completed before that date. The returns for this period will be due on April 15 of the year following the year of death.

Trust Distributions

Beneficiaries often ask the trustee when they will receive their inheritance. Many people, having heard that living trusts avoid probate, assume that all administration procedures are avoided and that the trust property somehow passes to them automatically. Many beneficiaries are disappointed to learn that the trust administration process usually takes months rather than days or weeks. Trustees usually have an easier time with the beneficiaries-avoiding misunderstandings, saving time, and reducing costs-if they manage the beneficiaries’ expectations.

Trust distributions often occur in several stages. In some cases, a trustee can make preliminary distributions of a portion of the trust estate within a few months. If a trustee makes one or more preliminary distributions, they should reserve sufficient funds for payment of estate taxes, income taxes, administrative expenses, legal and trustee fees, debts and liabilities, etc.

Petition of Instructions

There is a popular misconception that a trust avoids all possibility of court involvement. If assets held outside the trust exceed $150,000, a probate may be required for the trustee to collect those assets and add them to the trust.

If a beneficiary believes the trustee has breached his or her fiduciary duty, the beneficiary may file a petition with the court to, among other things, compel the trustee to account; to redress an alleged breach of trust; to remove or suspend the trustee; or to surcharge the trustee.

Sometimes a trustee is uncertain about a particular course of action (e.g., selling a business or real property, or commencing litigation). In such cases, the trustee may petition the court for instructions about how to proceed. The beneficiaries are given notice of the hearing and a copy of the petition that describes the proposed action. The matter will then be addressed in court, and the beneficiaries will have an opportunity to appear and be heard. If the court approves the trustee’s petition, the trustee is protected against claims by the beneficiaries regarding that transaction.

How Barr & Douds Attorneys Can Help You Administer a Trust

Our lawyers have guided hundreds of clients through the trust administration process. Our clients often come from the Walnut Creek, East Bay region, but we also frequently represent trustees from outside the Bay Area or out of state. If you call us, we will give you an initial overview of the trust administration process at no charge. If you decide to hire us, we will ask you to compile the documents we need to begin the process: the decedent’s original will, a signed copy of the trust and any amendments, copies of the deeds to any real property, an original death certificate, recent account statements for all of the decedent’s financial accounts, the names and addresses of all beneficiaries and heirs, and the name of the decedent’s accountant.

We will then prepare the first round of documents necessary to begin the process and meet with you to execute those documents and advise you on what you should do next. If there is a dispute between the trustee and a beneficiary, or if the trustee decides to file an accounting or file a petition for instructions (both discussed below), the case would be filed in the county where the trust has its “principal place of administration.” Under Probate Code § 17002(a), a trust’s principal place of administration is “the usual place where the day-to-day activity of the trust is carried on by the trustee or its representative who is primarily responsible for the administration of the trust.” Thus, if a decedent died in Oakland, owned real estate in San Francisco, and the trustee lives in Walnut Creek, the principal place of administration would be Walnut Creek, and all court filings would be in Contra Costa County.

Trust the dedicated team at Barr & Douds Attorneys to provide you with the professional support and guidance you need to successfully administer your trust.

Why Choose Barr & Douds Attorneys for Help with California Trust Administration?

When it comes to trust administration in California, Barr & Douds Attorneys is the trusted choice for reliable and comprehensive assistance. Here’s why you should choose us:

• Expertise: Our team of experienced attorneys specializes in trust administration, ensuring in-depth knowledge of California laws and regulations.
• Personalized Approach: We understand that every trust administration situation is unique. We provide personalized guidance tailored to your specific needs and goals.
• Attention to Detail: We meticulously handle all aspects of trust administration, from asset management to tax compliance, with a keen eye for detail.
• Client Satisfaction: Our priority is client satisfaction. We strive to provide excellent service, clear communication, and prompt responsiveness throughout the process.
• Reputation: With a solid reputation built on trust and successful outcomes, we have earned the confidence of numerous clients in California.

Choose Barr & Douds Attorneys for professional and dedicated support in navigating the complexities of trust administration in California.