Creating a trust is a strategic way to safeguard assets, minimize tax exposure, and control how wealth is passed down. However, trusts require continuous oversight to ensure they align with the trustor’s goals and comply with legal requirements. Failing to manage a trust properly can result in delays, disputes, and unintended financial consequences.

Our Lansing trust administration attorneys at Mannor Law Group, PLLC provide dedicated legal support to keep trusts properly administered. We help trustees fulfill their obligations while preventing common mistakes that can compromise the trust’s purpose.

How Trustees Navigate the Complexities of Trust Administration

A trustor, also referred to as a grantor, is the person who establishes a living trust. They determine its structure, set the terms, and decide which assets will be included. Since a trust creates a fiduciary obligation, the trustor must appoint a trustee to administer it. Many trustors act as their own trustees during their lifetime.

A trustee must adhere to the trustor’s directives while ensuring compliance with all applicable laws. Managing a trust can be particularly challenging when diverse assets are involved, necessitating financial and legal expertise. Choosing an inexperienced trustee can result in mismanagement, leading to financial penalties or legal consequences. In cases of gross negligence, a trustee may even be held personally liable for any losses suffered by the trust or its beneficiaries.

If you are responsible for trust administration, legal counsel can provide invaluable guidance. We can help you meet your obligations while ensuring compliance with the complex regulations governing trust management.

Understanding a Trustee’s Role After the Trustor Passes Away

A trust allows assets to avoid probate and transfer directly to beneficiaries. Upon the trustor’s passing, the trustee must take immediate action to fulfill all legal and financial obligations.
Essential trust administration tasks include:

  • Notifying beneficiaries and creditors about the trust

  • Cataloging and reviewing all trust assets and income

  • Publishing legal notices in accordance with Michigan law

  • Ensuring asset distributions follow the trustor’s instructions

  • Handling trust property sales as necessary

  • Paying off final debts and expenses of the deceased

  • Filing tax returns and settling any outstanding obligations

  • Providing a final financial report to beneficiaries.

The difficulty of these tasks depends on the specifics of the trust.
At Mannor Law Group, PLLC, our Grand Blanc trust administration attorneys help trustees complete their duties effectively. We coordinate with financial advisors and personal representatives to ensure everything is handled correctly.

FAQs by Lansing Clients

What common trust administration pitfalls should trustees watch for?

Preventing trust administration errors involves defining terms precisely, appointing a qualified trustee, revising the trust when laws or circumstances change, preparing heirs through financial training, confirming all assets are properly titled in the trust, and strategically using tax benefits to reduce liabilities.

How do the legal and financial benefits of revocable and irrevocable trusts vary?

Choosing between a revocable and irrevocable trust depends on the grantor’s goals. A revocable trust allows full control over assets during the grantor’s lifetime, including the ability to make changes or dissolve it. However, these assets are not protected from creditors or included in tax benefits. An irrevocable trust removes assets from the grantor’s estate permanently, offering potential tax savings and protection from legal claims. The decision hinges on whether flexibility or asset security is the primary objective.

What options exist for modifying an irrevocable trust while staying compliant with the law?

Modifications to irrevocable trusts are rare but not impossible. Legal methods such as trust decanting, court intervention, or appointing a trust protector can introduce adaptability. Carefully drafting the original trust with future adjustments in mind can also provide room for modifications.

Common Mistakes: What Not to Add to a Living Trust

Placing assets in a living trust can provide security and avoid probate, but certain assets should not be included. Retirement funds, such as 401(k)s and IRAs, should remain in the account holder’s name to maintain tax advantages, and life insurance proceeds may lose their tax-exempt status if owned by a trust. If you have a child with special needs, creating a separate special needs trust can help ensure their financial stability. Additionally, assets in a trust are no longer entirely in your control, requiring approval from the trustee for future decisions. To ensure your estate plan is structured properly, consulting with an attorney is a wise step.

Consult Our Dedicated Trust Attorneys Today!

When it comes to trust administration and estate planning, Mannor Law Group is here to provide comprehensive Life Care Planning solutions that put your needs first. We understand the importance of protecting what matters most, which is why we take a proactive approach to ensuring your assets are managed according to your wishes. With our experienced attorneys by your side, you can move forward with confidence knowing your estate is in good hands. Call us today to schedule a consultation.