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A person may have set up a Trust as part of his or her estate planning. This might have been for tax planning purposes, or for other reasons. Upon that person’s death, the trust will need to be administered.
If you are the trustee, congratulations! You have some work to do.
If the trust was not fully funded, then assets belonging to the trust must be transferred to the trust. Probate assets may have to pass through the administration of a probate estate. If the assets are non-probate assets, they will pass outside the probate estate to the trust.
Ohio law requires certain notifications be given to beneficiaries at the start of the administration of the trust. The trust may have to obtain a bank account-- if there is not already one in the trust--and a tax identification number.
If the trust was only partially funded during the decedent’s lifetime and some assets needed to go through probate, the executor administering the probate estate may have the power to ask the trustee to with provide funds to the executor to fund the administration.
Under the terms of the trust, the trustee may be required to hold the trust funds for a time and to make periodic distributions to a beneficiary, either in amounts specified in the trust, or as determined in the trustee’s discretion. If payments are discretionary, you will have to decide whether and how to exercise your discretion.
Under Ohio law, and sometimes under the terms of the trust document itself, the Trustee is required to report the trust’s activities to the beneficiaries each year – what the trust received and what it paid out. The trust will likely have to file an income tax return, provide tax statements to beneficiaries, and perhaps pay taxes.
Eventually, it will be time for the trustee to make final distributions from the trust and close it out.
Each of these steps requires consideration and care. We can help you through the maze, to help make sure that you properly complete each step when it needs to be done. If you are overwhelmed at the prospect of administering a trust, or just need help with a particular part of trust administration, please contact us.