Trusts offer an effective way to protect wealth, avoid probate, and establish clear directives for distributing assets. However, they require careful administration to ensure they remain legally sound and function as intended. Without proper oversight, mismanagement can lead to disputes or financial consequences.

The Ann Arbor trust administration attorneys at Mannor Law Group, PLLC have extensive experience in guiding clients through the trust management process. We work to ensure compliance with all relevant laws while upholding the trustor’s intentions, helping beneficiaries avoid unnecessary complications.

The Trustee’s Responsibilities in Managing a Trust

A living trust is created by a trustor, also known as a grantor, who defines its terms and determines which assets will be included. Because trusts establish fiduciary relationships, the trustor must appoint a trustee to oversee the management of the trust. In most cases, the trustor serves as their own trustee during their lifetime.

The trustee has the legal responsibility to manage the trust in accordance with the trustor’s instructions while following all relevant state and federal laws. Administering a trust can be a complex process, particularly when multiple assets are involved, requiring financial acumen and regulatory compliance. Choosing the right trustee is essential to avoiding legal and financial issues. A trustee who mishandles trust assets or fails to comply with legal obligations may face financial penalties and, in some cases, personal liability for any damages caused by mismanagement.

If you have been named a trustee, consulting with a legal professional can help you understand your responsibilities. We offer legal support to ensure compliance and smooth administration, helping you navigate the complexities of trust management.

Trust Administration: Trustee’s Duties After the Trustor’s Death

Bypassing probate is a significant advantage of placing assets in a trust. Upon the trustor’s death, the trustee must assume control and take care of all legal and financial responsibilities before distributing assets.
Important trust administration duties include:

  • Informing beneficiaries and creditors of the trustReviewing and documenting trust assets and income

  • Publishing required legal notices under Michigan law

  • Carrying out asset distributions per the trustor’s instructions

  • Managing or selling trust property as needed

  • Settling final expenses of the deceased

  • Filing required tax returns and payments

  • Providing a final accounting to trust beneficiaries.

The complexity of these steps varies depending on the size and structure of the trust.
At Mannor Law Group, PLLC, our Grand Blanc trust administration attorneys provide experienced guidance to trustees. We work with advisors and representatives to ensure proper execution of the trust.

FAQs by Ann Arbor Clients

How can a trustee minimize risks and errors in trust administration?

A trustee’s responsibilities include structuring trust terms to prevent conflicts, assigning trustworthy administrators, keeping trust provisions current with legal and personal changes, preparing beneficiaries through financial education, ensuring proper asset funding, and applying tax-efficient strategies to lower obligations.

What makes a revocable trust different from an irrevocable trust?

Revocable trusts provide the flexibility to alter terms or dissolve the trust entirely while the grantor is alive, making them a convenient choice for estate management. However, they do not offer creditor protection since the assets remain in the grantor’s possession. Irrevocable trusts, on the other hand, are permanent, transferring ownership of assets out of the estate, which can lower tax liability and safeguard wealth from legal claims. Selecting the appropriate trust depends on the balance between control and financial security.

Can an irrevocable trust be changed if the original terms no longer fit the trustor’s needs?

Though irrevocable trusts are intended to be unalterable, legal tools like decanting, court modifications, or trust protector authority can allow for necessary changes. Including flexible provisions at the trust’s inception may also help accommodate future adjustments.

What Property Should Stay Out of Your Living Trust?

Many people use living trusts to manage their assets, but some property is better left out. Retirement accounts like IRAs and 401(k)s offer tax benefits that could be lost if placed in a trust, while transferring life insurance policies may lead to unintended tax consequences. For individuals with special circumstances, such as a dependent with disabilities, a separate trust may be necessary to meet their long-term financial needs. It’s also important to remember that once assets are placed in a living trust, you may need trustee approval to sell or modify them. Working with an estate planning professional can help you decide what assets to include and which should be handled differently.

Reach Out to Our Knowledgeable Trust Lawyers Now!

Planning for the future requires thoughtful consideration and expert guidance. At Mannor Law Group, we offer a Life Care Planning approach that goes beyond traditional estate planning, providing tailored solutions that safeguard your assets and protect your family. Our team is dedicated to making the process simple, efficient, and stress-free, ensuring that your trust and estate matters are handled with the utmost care. Don’t wait to secure your legacy—contact us today to learn how we can assist you.