Posted by Being a trustee while the grantor (person who created the trust) is alive usually only demands your attention during tax season. Each year any income that the trust earns needs to be distributed to the beneficiaries. After the grantor dies, a trustee quickly finds out that they are responsible for distribution of all trust assets. This is because the trust or the trustee’s name is listed on all of the assets. Even something as simple as getting mail forwarded requires a signature from the trustee along with death certificate and a copy of the trust document.
Other tasks include taking to the bank about the trust account, talking to the CPA about distributions and tax concerns, and getting assistance from the law firm that wrote the trust document. In my case, the original law firm passed their older trusts to a different law firm. Upon contacting the new law firm, I was told that I would need to schedule a meeting to speak with one of the lawyers. The fee quoted was $500 per hour just to speak with them. Obviously, this wasn’t what I wanted to hear. Basically, paying someone to tell me how to distribute the trust assets. With a copy of the trust, I could go to any law office for advice.
Unfortunately, every law office is going to charge a fee. The alternative is to ask AI questions about how the trust distribution should proceed. This has proved to be very helpful. AI has an answer for any question related to trusts and beneficiary distributions. Property assets are the most challenging because some need to be sold and others need to have documents changed at the local county office. Capital gains as a result of property sales need to be handled carefully. A trust has a very low threshold before reaching the highest tax bracket.
Being a trustee who lives out of state makes the process even more challenging. Learning the best way to distribute each asset and communicating with everyone involved has become my new part-time job. Since I am also a beneficiary, there is added incentive to avoid tax liabilities. Each of us has our own concerns about how a trust distribution will impact our financial situation. We want to avoid having to go back and fix distribution errors in the future. Once all the assets are distributed, I will celebrate no longer being a trustee.