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What is trust administration?

On Behalf of | Aug 4, 2022 | Trust Administration |

Trusts provide methods for managing significant wealth and assets. When preparing one, you need to make sure that your California trustee will distribute its assets according to your wishes.

Why should you set up a trust?

Trusts protect assets and wealth for the future. The reasons to establish a trust include:

  • You want to set up an education fund for your child.
  • You need a way to pass your inheritance to your loved ones.
  • You plan on setting up an investment trust so that your assets may grow in value over time.
  • You require a secure way to establish a life insurance policy.

Each of these reasons requires that the administrator of the trust ensures that your assets will be handled correctly.

What is trust administration?

Trust administration involves managing all the assets, filings and distributions associated with your trusts. These administrative tasks entail complex procedures designed to protect your beneficiaries and investments, including the following:

  • Notifying beneficiaries of the trust
  • Filing tax returns for deceased individuals
  • Obtaining IRS tax IDs
  • Filing annual trust tax returns
  • Collecting life insurance policies
  • Notifying any applicable state or government offices

What is the difference between trustees and beneficiaries?

A trustee manages a trust on a daily basis. The term beneficiary refers to any person or entity that may benefit from the trust.

Why should you plan for trust administration?

Planning for the administration of your trust is as important as setting up the trust. Your trustee may deal with complex legal, administrative and financial decisions, and you need to choose someone who can handle all of these responsibilities well.