A Trustee plays an integral role in estate settlement proceedings. This person is required to act as the estate fiduciary and oversees distribution of inheritance property. They are also responsible for settling estate related matters and filing a final tax return on behalf of the decedent.
A Trustee has to be appointed for any type of trust including living trusts, testamentary, and irrevocable life insurance trusts. This person should be someone that is dependable and can be relied upon to make decisions for the greater good of the estate. They should be good with finances, able to multi task, and capable of meeting required deadlines.
Every type of trust is comprised of three people and includes the Trustee, Trustor, and Beneficiary. The Trustor is the person that sets up the trust and beneficiaries are those who receive estate assets upon the Trustor s death.
There are different ways of setting up trusts. Much depends on tax saving strategies and types of assets owned. Any assets that are not protected by the trust might have to pass through probate before they can be distributed to beneficiaries.
Probate laws vary by state, so it s best to obtain legal advice before initiating estate settlement procedures. Most people don t have to manage both trusts and probate, but if it happens it s best to be informed about the process.
Depending on the circumstances, probate can last several months. The average duration is four months. The good thing about trusts is estate settlement happens within about 45 days.
When assets are placed in a trust they are no longer part of the estate and therefore exempt from probate. The Trustor has to write a Will that gives direction about how the estate should be settled. Wills are also used to name beneficiaries and their inheritance gifts.
Trusts are one of the best options for safeguarding estate assets. Not only is property exempt from undergoing probate, assets are often exempt from estate and inheritance taxes. In addition, settling a trust is less time consuming than settling probated estates and assets can be distributed to heirs in a timely fashion.
Trusts are typically used when estate value surpasses $100,000. Estates valued below that amount can take advantage of estate planning strategies that offer better benefits than trusts. These methods include obtaining joint titles for real property and automobiles; establishing beneficiaries for retirement accounts, investment portfolios, and bank accounts; or gifting cash or assets while still alive.
It s not hard to setup a trust, but does require help from a professional estate planner or lawyer. This is especially true when establishing an irrevocable trust. These kinds of trusts provide a lot of flexibility throughout the planning stage, but they cannot be altered without court authorization once they are in place.
The fees to setup a trust can be as little as $100 to more than $1,000. It all depends on the type of trust and estate assets. A lot of people that want to setup a living trust use the online legal service provider of LegalZoom.com
Regardless of using an estate planner, lawyer, or online service it s best to have documents organized and an inventory list of assets. It s recommended to talk to the person you plan to appoint as the Trustee to make certain they are willing to carry out required duties.
California real estate investor and probate liquidator, Simon Volkov shares estate planning information and resources to help people protect their property. He offers tips for selecting a Trustee; ways to avoid probate; and details about the different kinds of trusts at http://www.SimonVolkov.com.