topic | executing a living trust

Trusts are commonly part of estate planning and thus, estate administration. A Trust may be advantageous over a Will or in combination with a Will because it:

  • bypasses probate
  • reduces or avoids estate taxes
  • manages property on behalf of the decedent
  • minimizes time required to distribute assets
  • protects assets given to minors

This topic specifically focuses on the administration of an estate governed by a Living Trust (also known as a Revocable Living Trust). The Living Trust is the most basic and widely held. Involvement of an estate attorney and a financial advisor is always recommended. There are many other types of Trusts suited for a particular situation, purpose, and outcome including: Children’s Trusts, Bypass Trusts, Generation Skipping Trusts, and Charitable Trusts. Each incorporates unique provisions of the law as well as intent. 

The execution of a Living Trust precedes probate. Assets covered by the Living Trust, are not subject to probate. When there is a Trust, executors have parallel responsibilities:

  • coordination of the administration of the Trust (non-probate assets)
  • administration of estate assets (probate and non-probate assets)

Assume for the following steps that the executor and the trustee are one and the same. The executor, if not also the trustee, should work together with the trustee to ensure appropriate distribution of assets. The following steps may be executed as a team. 

    Step 1: Obtain an Affidavit  
    Step 2: Identify Property Held in Trust  
    Step 3: Notify Heirs and Beneficiaries  
    Step 4: Appraise Valuable Property  
    Step 5: Pay Debts and Expenses  
    Step 6: Transfer Property  
    Step 7: Close the Trust