If the relative or friend has died, matters a successor Trustee may need to attend to include:
- Reviewing the applicable Trust Agreement, and all amendments, to determine what your responsibilities are, and what discretion you may have, as successor Trustee.
- Obtaining from the IRS a new Taxpayer Identification Number for the Trust.
- Locating any original Will, and any original Codicils that amend the Will, and then filing them with the appropriate Probate Court.
- Determining the identity and contact information of all Trust beneficiaries, and then informing them of what has happened.
- Making a list of all assets that are titled in the Trust.
- Making a list of all assets that are not titled in the Trust, determining whether any such assets are payable to the Trust either under a beneficiary designation form, or pursuant to the provisions of a Will, and then determining how to proceed with respect to such assets.
- Re-titling all of the Trust assets into your name, as successor Trustee of the Trust.
- Reviewing how the Trust assets are currently invested, and then determining whether any securities should be retained or sold, and if sold, how the net sales proceeds should be reinvested—since you are managing the Trust for their benefit, this will involve discussions with the Trust beneficiaries, and also with an investment advisor.
- Ensuring that any home or apartment is made secure, and that arrangements are made for the timely payment of (a) any amounts due under a mortgage or home equity loan, and (b) any other amounts that may be due, such as condominium assessments, homeowners insurance policy premiums, and real estate taxes.
- Reviewing the homeowners or other insurance policy for each parcel of real estate, and then discussing with the insurance company whether the insurance will remain in effect even though a home or apartment may now be vacant.
- Determining whether any home or apartment needs to be sold, and if so determining whether a real estate brokerage firm should be contacted to market the home or apartment—since you are managing the Trust assets for their benefit, this will also involve discussions with the Trust beneficiaries.
- Preparing an initial Summary for the Trust beneficiaries that
- Lists the Trust assets and their respective estimated values,
- Describes in detail the provisions in the Trust that have been made for each of them,
- Estimates the costs that will be involved in settling the Trust, and
- Estimates how long the settlement of the Trust will take.
In our practice, we generally provide each of the Trust beneficiaries with a Flow Chart that graphically summarizes all of the above items. In that way, the beneficiaries are not required to read, comprehend, and then remember the provisions of a lengthy Trust Agreement, or what was said at an initial meeting—instead, they may retain the Flow Chart and refer to it as needed during the entire settlement of the Trust.
- Valuing all of the Trust assets as of the date of death, preparing an Inventory listing the respective values, and then providing the Trust beneficiaries with a copy of the Inventory.
- Ensuring that all prior Personal Income Tax returns of the relative or friend are up to date, and ensuring that the final Personal Income Tax returns of the relative or friend are timely filed, and that all proper Income Taxes are timely paid.
- Ensuring that the Fiduciary Income Tax returns for the Trust, which are now required to be filed each year during the settlement of the Trust, are timely filed, and that all proper Trust Income Taxes are timely paid—this may involve discussions with an accountant, if the accountant will be preparing the Fiduciary Income Tax returns.
- Ensuring that any required Federal and Illinois Estate Tax returns are timely filed, and that any applicable Estate Taxes are timely paid.
- If the relative or friend owns real estate in another jurisdiction, ensuring that any Estate Tax return or Inheritance Tax return required by such other jurisdiction is timely filed, and that any applicable Estate Tax or Inheritance Tax is timely paid.
- Providing the Trust beneficiaries with a Final Accounting that summarizes all activities that have taken place since the date of death.
- Having the Trust beneficiaries approve the Final Accounting, and also agree, in writing, to reimburse you if any expenses first arise after the Trust settlement has been completed and after all of the remaining Trust assets have been distributed.
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