administer a revocable trust

[frank]

I went to an elder law workshop last night and was thinking about having them do a revocable trust, deed to transfer property to trust, will, and a couple of different types of power of attorney. Then one question that I did not get answered and was curious about was. Is there a set of rules that you have to go by to administer the trust and where do I find it? Do you need a lawyer to administer the revocable trust? I assume somewhere there is a guide or list of things you need to do, anyone know where is it accessible? thanks

 

[wolf]

You do not need a lawyer to administer the revocable trust. You can administer the trust yourself.
Once the Trust is prepared. Not really that complicated.

Ask more questions on this site. Try and find old post that explain Revocable living Trusts.
Keep researching and asking questions.

 

[cathy63]

There's really no administration for a revocable trust. You have full control of the accounts and property and can buy or sell at will. You don't do tax returns for revocable trusts, everything just passes through to the grantor/beneficiary (you) and it goes on your personal return.

After you die and it becomes an irrevocable trust, then the successor trustee has to act as a fiduciary for the beneficiaries. The trustee will have to get an EIN and file tax returns for the trust until all its assets are distributed and it is dissolved. You can make the trustee and beneficiary the same person.

 

[Kings over Queens]

The trustee you nominate must follow the directions you put into the trust. Not so much a set of rules, but rather, your set of wishes and instructions. A law degree isn't necessary to be the trustee, but I would suggest someone with some financial acumen and understanding of how things work. This will be magnified by the amount of discretion you give the trustee. Example, if you give the trustee full discretion to invest funds, clearly you want someone with experience. Conversely, if you direct the trustee to invest in only cd's or one of the 3 S&P index funds, less experience would be necessary.

Another factor to consider is the amount of work involved. Being an executor of a will and trustee of a trust takes time, effort, and depending on circumstances and beneficiaries, potentially some angst.

 

[Koolau]

I'm sure I've asked this but say a couple has a trust that leaves everything to the other upon death. When the second person dies, the trust needs a trustee, right? How do you choose that person IF you don't want to dump the responsibility on a child OR if you don't find any relative who you consider competent or maybe even trustworthy?

I suppose a law office or trust department of a bank would do such a thing, but my gut tells me they would take a considerable fee for not much w*rk and the temptation to churn for THEIR profit might be too great to resist.

 

[OldShooter]

The trustee you nominate must follow the directions you put into the trust. Not so much a set of rules, but rather, your set of wishes and instructions. A law degree isn't necessary to be the trustee, but I would suggest someone with some financial acumen and understanding of how things work. This will be magnified by the amount of discretion you give the trustee. Example, if you give the trustee full discretion to invest funds, clearly you want someone with experience. Conversely, if you direct the trustee to invest in only cd's or one of the 3 S&P index funds, less experience would be necessary.

Another factor to consider is the amount of work involved. Being an executor of a will and trustee of a trust takes time, effort, and depending on circumstances and beneficiaries, potentially some angst.

Be careful. The OP is asking about a rev trust, typically used when the grantor is alive, and this response pertains to irrev trusts, typically created at death. Hence, the response is irrelevant to the OP.

@Koolau's subsequent post also pertains to irrev trusts, not to the OP's question.

 

[GrayHare]

If you are the trustee, the main initial adminstration effort will be to retitle assets into the name of the trust. If this is your trust funded with your assets, the trust does not even need its own tax ID. You will simply file the same annual personal tax return as before, with trust income reported as income of your tax ID. If the trust continues to exist after you pass, it then needs its own tax ID and to file its own tax return.

 

[donheff]

I'm sure I've asked this but say a couple has a trust that leaves everything to the other upon death. When the second person dies, the trust needs a trustee, right? How do you choose that person IF you don't want to dump the responsibility on a child OR if you don't find any relative who you consider competent or maybe even trustworthy?

I suppose a law office or trust department of a bank would do such a thing, but my gut tells me they would take a considerable fee for not much w*rk and the temptation to churn for THEIR profit might be too great to resist.

Depends on whether the trust is ongoing. Once a trust is fulfilled, it dissolves. In our case, after the second of us dies, the assets are distributed as directed in the trust, then poof. With no heirs, the trust could distribute to charities, then poof. With a dependent child it could continue and should designate who the trustee will be.

As an aside, these things tend to be constructed in a manner designed to confuse. Every few years, I would read ours and say, "WTF?" I had a couple of AIs summarize them in plain language for the kids and found those to be excellent guides - much better that an outline from our trust attorney. You can read the summary and follow along in the actual text and easily figure out what is going on. DW is a lawyer and agreed.

 

[frank]

Depends on whether the trust is ongoing. Once a trust is fulfilled, it dissolves. In our case, after the second of us dies, the assets are distributed as directed in the trust, then poof. With no heirs, the trust could distribute to charities, then poof. With a dependent child it could continue and should designate who the trustee will be.

As an aside, these things tend to be constructed in a manner designed to confuse. Every few years, I would read ours and say, "WTF?" I had a couple of AIs summarize them in plain language for the kids and found those to be excellent guides - much better that an outline from our trust attorney. You can read the summary and follow along in the actual text and easily figure out what is going on. DW is a lawyer and agreed.

what are AIs? I 'm sorry I just couldn't figure it out.

 

[donheff]

what are AIs? I 'm sorry I just couldn't figure it out.

Sorry - Artificial Intelligence large language models like ChatGPT, Claude Gemini, etc. I just uploaded my Trust document to Claude and ChatGPT to see how they would writing a simple summary. If you are not familiar with them, I would recommend that you not bother. They can make mistakes and can be a little tricky to use well.

 

[Dash man]

I'm sure I've asked this but say a couple has a trust that leaves everything to the other upon death. When the second person dies, the trust needs a trustee, right? How do you choose that person IF you don't want to dump the responsibility on a child OR if you don't find any relative who you consider competent or maybe even trustworthy?

I suppose a law office or trust department of a bank would do such a thing, but my gut tells me they would take a considerable fee for not much w*rk and the temptation to churn for THEIR profit might be too great to resist.

Fees vary for professional trustees like most things. We chose the Charles Schwab Trust Company who offers reasonable fees compared to most banks. We also made our attorney a Trust Protector who can fire the Trustee if needed.

 

[wolf]

Be careful. The OP is asking about a rev trust, typically used when the grantor is alive, and this response pertains to irrev trusts, typically created at death. Hence, the response is irrelevant to the OP.

@Koolau's subsequent post also pertains to irrev trusts, not to the OP's question.

Agree 100%. Poster's need to be more "careful". Answer OP's question so as not to confuse the issue.

 

[Kings over Queens]

There's really no administration for a revocable trust. You have full control of the accounts and property and can buy or sell at will. You don't do tax returns for revocable trusts, everything just passes through to the grantor/beneficiary (you) and it goes on your personal return.

After you die and it becomes an irrevocable trust, then the successor trustee has to act as a fiduciary for the beneficiaries. The trustee will have to get an EIN and file tax returns for the trust until all its assets are distributed and it is dissolved. You can make the trustee and beneficiary the same person.

Not in our case. I suppose you could direct the trustee to funnel remaining assets into an Irrevocable Trust, but our documents aren't worded that way.

 

[Kings over Queens]

Be careful. The OP is asking about a rev trust, typically used when the grantor is alive, and this response pertains to irrev trusts, typically created at death. Hence, the response is irrelevant to the OP.

@Koolau's subsequent post also pertains to irrev trusts, not to the OP's question.

The trustee of our REVOCABLE trust has discretion to retain investments, make new investments, sell property, make distributions, settle claims, lend, purchase from donor, to employ investment advisors and others, exercise options and other powers. I read that straight from the document.