A testamentary trust is a common addition to a comprehensive estate plan for a variety of reasons. When any type of trust is created, a Trustee must be appointed to administer the trust and manage the trust assets. Ideally, the Maker of the trust will discuss the appointment with the prospective Trustee before making a final decision about the appointment; however, all too often a Trustee is appointment with no prior knowledge of the appointment. If you find yourself in such a position you need to know what to do if you were appointed the trustee of a Testamentary trust.
A testamentary trust is one that only takes effect upon the death of the Maker. Therefore, if you recently learned that you are the Trustee of a testamentary trust it may also mean that the Maker recently died. If so, you have only the terms of the trust to guide you as administrator of the trust. There are some steps you should take, however, as soon as possible after finding out that you are the Trustee of a trust, including:
- Review the trust agreement. A trust agreement can include almost any terms the Maker wishes to include as long as those terms are not illegal or impossible to fulfill. As the Trustee, you are legally obligated to administer the trust and manage the trust assets according to those terms. For this reason, the first thing you should do is read through the trust agreement.
- Consult an estate planning attorney. Although the trust terms dictate how the trust is administered, there are a variety of state and federal laws that apply to a trust. Consulting with an estate planning attorney ensures that you do not run afoul of any of those laws.
- Inventory the assets. You need to have an accurate picture of the type, location, and value of all assets held by the trust since you will be in charge of managing and likely distributing the trust assets to beneficiaries.
- Communicate with beneficiaries. A Trustee has a fiduciary duty to the beneficiaries of the trust. Communicating with beneficiaries about trust business is part of that duty. Therefore, as soon as you know you will be serving as Trustee you should let the trust beneficiaries know.
If you have additional questions or concerns about trust administration, or your Illinois estate plan in general, contact the experienced Illinois estate planning attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.
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