Trust administration is the logical byproduct of proper estate planning. Trusts may require administration during the life of the grantor if the grantor becomes incapacitated. A decedent’s trust must be administered by the trustee after the death of the grantor; even if it is only to supervise the immediate distribution of all trust assets to the named beneficiaries. However, some trusts, according to their terms, must be administered for an extended period. For example, a trust holding assets for children until they attain certain ages (often either twenty-five, thirty, or thirty-five), or for the benefit of grandchildren, may require ongoing long-term administration. In all events, trustees (and for that matter, personal representatives of probate estates) are responsible for tax matters (income and estate), and must address the claims of creditors.
Probate estates require administration during their pendency – which, due to the mandatory four-month publication period, must continue for at least six months. The personal representative named in the will (or appointed by the court if the decedent died intestate) may be required to administer the probate estate for much longer periods, perhaps years, depending on the nature of estate assets and claims against the estate. Family disputes, ongoing litigation, IRS audits, and assets that are difficult to liquidate are a few examples of events that can cause extended probate administration. A person nominated in a will has priority for appointment by the court as personal representative. If there is no will, state law lists those with priority for appointment.
Both trustees and personal representatives are "fiduciaries" under Michigan law. As such, they are held to the highest standard of behavior under the law. Failure to comply with their fiduciary obligations or to act in accordance with established fiduciary standards may expose them to personal liability. At Accettura & Hurwitz, we advise our client-fiduciaries of the requirements imposed upon them in order to meet the standard of care, including the following:
Accettura & Hurwitz Attorneys and Counselors are experienced Michigan estate planning lawyers. Don’t put off creating your estate plan. Contact us today!