- Trust administration means making sure that a trust’s assets are dispersed according to the stipulations in the trust.
- Trustees, often with the help of attorneys, will administer trusts after a grantor dies. Sometimes that administration happens all at once; sometimes it occurs on an ongoing basis.
- Generally, trusts take a minimum of 12 to 18 months to administer in California. This time can be extended by certain duties (like selling houses) and the participation of large-scale governmental bureaucracies (like the IRS).
- Currently, the estate tax does not apply to estates worth less than approximately $22 million per couple. This may change in 2026, when the exemption rate for couples may be halved.
- Most assets—with the exception of life insurance policies—are subject to Probate once the Probate process starts.
Essentially, trust administration involves making sure that the assets in a trust are distributed in accordance with the wishes of the creator of the trust (sometimes referred to as “the grantor” or “the trustor”).
Eventually, with every trust, the creator or creators of the trust—the grantor(s) or trustor(s)—pass away. At that point, the trustee—usually with the help of an attorney—administers that trust. This means gathering the assets together, selling the house if the house is to be sold, and taking care of any other issues that need to be attended to immediately.
The trustee (with the help of a CPA) also files tax returns on behalf of the decedent and the trust. Then, with the assistance of legal counsel, the trustee disburses those assets either outright (if directed by the trust to do so), or creates an ongoing trust for beneficiaries if there is some sort of creditor trust, spousal protection trust, or special needs trust. In the case of an ongoing trust, the trustee will maintain administration on an ongoing basis.
Usually, the trustee or trustees and their legal counsel will work together in an effort to administer the trust and to disburse the assets. This typically takes at least 12 to 18 months, depending upon the complexity of the estate and the trust. Certain parts of trust administration—like selling houses—will often increase the time it takes to administer the trust.
Trust administration involves dealing with third-party government agencies, especially the Internal Revenue Service, which are very slow on the uptake in acknowledging and receiving documents so that you can clear all of the obligations of the estate. This is another reason why this process takes so long.
In some cases, the trustee will also be responsible for paying estate tax on behalf of the estate. In most situations, for the vast majority of people, the estate tax will not be an issue. So long as your estate is less than approximately $25 million per couple, or $12.06 million dollars per individual, you are exempt from this tax. So, in other words, unless your individual estate is worth far beyond $12.06 million in value, or $25 million per couple, there will be no federal estate tax. California does not have any estate tax.
Now, that exemption amount is supposed to revert in 2026, to about half of what it currently is. That is—you would have to have an estate of at least $12.06 million per couple or about $6 million per person to have to pay the estate tax. If you are in danger of getting hit with the estate tax if these changes are made in 2026, there are some estate planning issues that are important to take into consideration in order to avoid paying that tax.
A consultation with an estate planning attorney is the best way to find out what kinds of things you can do in order to avoid paying an estate tax if you’re subject to it—now or in the future.
What Assets are Subject to Probate Once a Probate Case is Opened?
Once a Probate case is opened, all of your marital assets are subject to Probate. The exception is if you have a life insurance policy, which the Probate process cannot touch. Otherwise, 99% of the assets in your estate are subject to Probate.
So, in summation, creating an estate plan does a lot of things. It gives you peace of mind. It tells you how to disperse assets in order to avoid creating familial problems, especially with blended families. These things are all very important.
For more information on Trust Administration In The State Of California, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (949) 287-8884 today.
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