Trust Administration
Trust administration is the process by which a trust is processed following the death of the settlor, or creator of the trust, to comply with the terms of the trust. The administration must occur when there is a death of a settlor of a trust, even if a trust has two settlors. A surviving spouse settlor also will need to complete the administration of the joint trust with their spouse.
Why Is Any Administration Required With a Trust?
A common misconception is that by having a living trust, no administration is required. It is true that the administration of a trust will typically avoid a court probate proceeding. This does not mean, however, that an administration is not required. In fact, a typical trust must be processed in much the same way a probate estate is processed through the court.
Is Court Action Required?
Trusts are generally drafted and designed to avoid the necessity of having a court administer the trust after the settlor’s death. Occasionally, there are instances where a trust is ambiguous, needs clarification, or the trustee desires court approval of actions taken in the administration. In those situations, a trust administration matter can require court action. The advisability of seeking court approval is best determined with a professional well-versed in trust administration matters.