Guiding You Through Trust Administration

The Law Office of Adam S. Bernick provides efficient counsel and representation during trust administration. We advise trustees in the administration of the trust and oversee the passing down of assets according to Pennsylvania law. In addition, we represent clients involved in disputes, as well as serve as a trustee or alternative trustee for families that need this service.

If you are seeking legal representation in any of these matters, contact our firm today at 215-645-7866. Our principal attorney has served the estate planning and administration needs of Philadelphia for nearly two decades.

Understanding The Trust Administration Process

Compared to the administration of a will, the trust administration process is straightforward. Families do not need to go through probate, which means there is no court involvement. In general, the administration of a trust is a simple matter of obtaining the records and distributing the assets according to the terms of the trust.

Sometimes, however, administering a trust is complicated by legal issues. If a beneficiary believes the trustee has mismanaged the assets or acted in bad faith, litigation may be necessary. For example, a family member may file a claim against a trustee who withholds funds for personal gain.

Our firm is knowledgeable about trust administration and experienced in handling trust and fiduciary litigation claims. We can help minimize the emotional and financial consequences these disputes have on you and your family.

Learn What A Trustee Has To Do Using Our Roadmap

Each trust administration process has its own unique set of circumstances and challenges. However, the general workflow from start to finish has milestones that a trustee will want to ensure are taken care of.

• Prepare to act as trustee. Your first steps after the death or incapacity of the trustor (the person who established the trust) will include locating the trust paperwork and any amendments. Review the trust document as well as pour-over wills.
• Assemble an asset list for all accounts and property belonging to the estate.
• Notify trust beneficiaries. Our attorney can help you meet jurisdiction-specific deadlines for contacting beneficiaries and advising them of the terms of the trust and your contact information.
• Secure and update assets. Locating physical assets and the paperwork or intangibles (such as bank accounts) should be followed by retitling them, having their worth evaluated and updating insurance policies, when appropriate.
• Settle outstanding debts. Creditors may stake a claim against the trust’s assets. You must notify creditors, investigate their claims and pay valid debts before moving forward to the next steps.
• Hire professionals to assist with trustee responsibilities. The trustee may hire Certified Public Accountants, trust administration attorneys, financial advisors or appraisers to execute their duties appropriately.
• Provide a record of trust accounting to beneficiaries. Trustees are required to deliver an annual accounting of the income, investments and expenses paid by the trust. While all trustees must keep accurate records, Pennsylvania attorneys acting as fiduciaries are held to even stricter standards, including mandatory monthly “three-way reconciliations” of trust accounts to ensure every penny is accounted for. Trusts with taxable income must file a PA-41 form. While some records have specific requirements, it is generally recommended to keep all trust accounting and tax records for at least seven years to protect against potential audits or legal claims.
• Demonstrate financial transparency and restraint. Investments held by the trust must be managed to the “prudent investment” standard, meaning they are overseen in a manner consistent with a plan that balances risk with beneficiary needs. Providing accurate reports of trust activity to beneficiaries also documents that the trustee is not engaging in activities indicative of a conflict of interest.
• Distribute the assets of the trust. Trustees may or may not have discretion in how they distribute the trust assets. Some trusts give trustees some leeway in how the trust is distributed; others do not.

Trust administration in Pennsylvania was recently modernized by Act 64 of 2024 (The Directed Trust Act). This law codifies the roles of Trust Director, Trust Protector and Trust Director for Investments, allowing for the separation of duties and liability among different specialists. This law allows trustees to leverage the skills of nontrustees in critical parts of trust administration.

Addressing Common Trustee Challenges

As a trustee, you may face the following hurdles to executing your duties. Our attorney can help you with these tasks or advise you on best practices for handling them appropriately.

Locating And Valuing Trust Assets

Even if a trustor has taken the step of establishing a trust to protect the transfer of their assets, they may not leave behind organized personal records. You may need to search public records, contact banks or insurance companies, or hire a forensic accountant to locate all of the assets.

Dealing With Real Estate In Trusts

A trustor may have put their house in a trust to avoid probate after their death. Real estate must be properly retitled on the deed to name the trustee as the current owner.

Managing Business Interests

Trustors may place their business’s assets or their ownership interests into a trust. This can assist succession planning and potentially avoid probate, but it is not without risk to the business or the beneficiaries. An experienced Pennsylvania estate planning attorney can help you oversee this part of the process.

Handling Digital Assets

Much of our lives now takes place online. Digital assets covered by a trust can include everything from bank accounts or cryptocurrency wallets to social media accounts and online photo storage platforms. Pennsylvania passed the Revised Uniform Fiduciary Access to Digital Assets Act in 2020, which governs what you, as a fiduciary, can do as you gather and distribute digital assets.

Addressing Creditor Claims

The question of how much and whether a creditor can claim part of a trust’s assets depends on what type of trust (irrevocable or revocable) it is, if a living trustor self-settles an irrevocable account, if the creditor met certain timelines after the trustee’s grant of letters were advertised, and other factors. Attorney Bernick can help you evaluate creditor claims and determine who to pay, and in what order.

Hiring a qualified trust administration attorney can help you discharge the commitment you made as a trustee and help you avoid missteps that can lead to trust litigation.

For A Skilled Lawyer To Assist With Trust Administration, Contact Us.

You don’t have to honor your trustee duties without help. The Law Office of Adam S. Bernick offers a free initial consultation to discuss your situation. Call 215-645-7866 or send us an email.