Trusts are a crucial component of many estate plans, offering a means to protect assets, avoid probate, and control how inheritances are distributed. While a living trust provides flexibility and tax benefits, it also comes with responsibilities that require continuous management and legal oversight to remain valid and effective.

At Mannor Law Group, PLLC, our Flint trust administration lawyers assist clients in efficiently managing trusts while ensuring full compliance with state and federal regulations. We help prevent costly errors and work to preserve the trustor’s intentions every step of the way.

Key Duties of a Trustee in Trust Administration

A person who sets up a living trust is known as a trustor or grantor. They decide how the trust will function and which assets will be included. Because a trust creates a fiduciary relationship, the trustor must appoint a trustee to oversee its management. Most trustors initially act as their own trustee.

The trustee’s role is to follow the trustor’s directives while ensuring compliance with all relevant laws. Managing a trust can be particularly challenging when it involves multiple assets, requiring financial acumen and adherence to legal requirements. Trustors must select a trustee who has experience with trust administration. Mismanagement can result in severe financial penalties, and in some cases, trustees can be held personally accountable for any damages caused by negligence or errors in administration.

If you are tasked with managing a trust, obtaining legal guidance is highly recommended. We can assist you in fulfilling your duties, helping you navigate the complexities of trust administration while protecting both the trustor’s intent and the beneficiaries’ interests.

Managing a Trust: Trustee Obligations After the Trustor’s Death

One of the primary benefits of a trust is that it allows assets to transfer without probate. After the trustor’s passing, the trustee must take control of the trust and carry out all necessary legal actions before distributing assets.
Typical trust administration duties involve:

  • Notifying beneficiaries and known creditors

  • Reviewing and documenting trust income, assets, and property

  • Ensuring compliance with Michigan’s legal notice requirements

  • Carrying out distributions per the trustor’s directives

  • Overseeing asset sales when necessary

  • Settling outstanding expenses of the deceased

  • Handling the trustor’s final tax filings and payments

  • Providing a final trust accounting to beneficiaries.

The level of effort required depends on the complexity of the trust.
At Mannor Law Group, PLLC, our Grand Blanc trust administration lawyers assist in navigating the legal and financial aspects of trust management. We coordinate with advisors and personal representatives to ensure all duties are properly handled.

FAQs by Flint Clients

How can trustees ensure they follow proper trust management procedures?

To ensure smooth trust administration, trustees should define terms explicitly, appoint responsible individuals or corporate trustees, update the trust when circumstances shift, educate beneficiaries on managing inheritances, properly transfer assets into the trust, and apply tax-saving strategies to maximize benefits.

What are the key contrasts between revocable and irrevocable trusts?

With a revocable trust, the grantor retains control over their assets, with the ability to amend or revoke the trust as needed. While this offers flexibility, it does not provide creditor protection since the assets remain part of the estate. An irrevocable trust, however, permanently removes assets from the grantor’s control, potentially reducing estate taxes and shielding them from creditors. The right choice depends on the grantor’s priorities, whether they value flexibility or enhanced financial protection.

Are there legal methods to modify the terms of an irrevocable trust?

Despite their rigid nature, irrevocable trusts can sometimes be modified through legal mechanisms. The trust protector may have the authority to adjust terms, or a court may permit alterations due to unforeseen circumstances. Decanting the trust into a new one is another strategy for making necessary updates.

Are There Assets You Shouldn’t Include in a Living Trust?

While a living trust is useful for avoiding probate and managing assets, some property should remain outside of it. Retirement accounts like 401(k)s and IRAs have tax-deferred benefits that can be disrupted if placed in a trust, and life insurance proceeds may be subject to taxes if the policy is transferred incorrectly. Special financial arrangements, such as funds set aside for a disabled child, may be better suited for a special needs trust. Another consideration is that assets in a trust are no longer under your direct control, meaning you may need the trustee’s approval for future transactions. Consulting a knowledgeable estate attorney ensures that you structure your trust properly and make informed decisions about your assets.

Get in Touch with Our Skilled Trust Lawyers Now!

Mannor Law Group is committed to providing more than just legal assistance—we offer a complete Life Care Planning approach that ensures your estate and trust affairs are handled with precision and care. Our experienced team takes the time to understand your goals and provide solutions that align with your needs. Whether you’re establishing a trust, managing an estate, or seeking long-term planning strategies, we are here to help. Contact us today to get started on a secure plan for you and your family.