Successor Trustee Checklist - Post Funeral Process

Final Stage: Taking Custody of the Trust, its Assets, and the Administration requirements.

Working with your trust advisors, you now have to manage the administration of the trust.  Here are a few checklist items you should be aware of, which you as a trustee are required to fulfill:

  • Change Trustee names and signature cards on Existing Accounts and if needed, open new accounts. For each bank and investment account, you will need to change the name of the Trustee and signature cards to determine who has authority to manage the account from the grantor to you.  If you followed our pre-funeral checklist, this may not be required.
  • File claims for insurance, Veterans and Social Security benefits.
  • Estimate cash needed for taxes, fees and other expenses of settling the estate.  Prepare a list of current bills owed to doctors, hospitals and funeral homes.
  • Identify if there are debts payments against the trust’s assets, such as mortgages or liens. Prepare a list of those debts and liens.  You are required to diligently search for debts. Once you find debt obligations, accept and pay them or contest the debt, and always obtain receipt or satisfaction of debts. If appropriate, you have a duty to deny payment of a claim and to defend that denial in court.
  • If you haven’t prepared with the Pre-death checklist, begin a search for assets. As Trustee, your duty is to locate and take possession of all of the trust's assets.  Also find supporting ownership data. Once you have found an asset, collect the statements, certificates, contracts and policies regarding that asset.
  • Prepare an asset inventory list with date of death values of all trust assets and, in states where it is applicable, send copies to all trust beneficiaries. You must determine the Asset’s value on the date of death for investments and securities. The key wealth advisors can help you find these values.
  • Check to see if you must file waivers and affidavits releasing property from estate tax liens with the County Clerk's office or the State (if applicable).

Ongoing Administration of the Trust.

  • Collect and deposit all income, receivables and other moneys due to the trust.
  • Manage the Investment of Assets. As Trustee, you have the duty to preserve, protect and invest the assets of the trust estate.
  • Manage the Real Estate. If any real property is vacant. You should take steps to secure the property and contents from vandalism and damage. If anyone is residing in the house, you should determine whether that person has the right to be in possession of the house. If the occupants are tenants, you should review the terms of the lease, if written, and make sure to enforce the provisions. You should notify the tenants in writing that the owner is deceased and that they are to make all future payments under the lease to you as trustee. Rent must be collected and deposited in the trust bank account.  Make sure insurance is in force and payments up to date.
  • All trust assets must be valued annually or when specified by Law
  • Trustees are required to annually communicate to the beneficiaries of the trust’s status.  This may include “Crummy Letters” or other forms of communication to each beneficiary.
  • File Tax Returns and Pay Taxes Due.
    • Decedent's final Form 1040.
    • Trust income tax return (Form 1041)
    • Estate Tax Return (Form 706

Trust Distributions

  • You should read and fully understand the distribution provisions of the trust agreement. The distribution to beneficiaries is made after all debts of the decedent and expenses of the administration are paid. If distributions equal to a certain percentage of the estate are called for, then those percentages are calculated based upon the net value of the estate after payment of debts, expenses and taxes.
  • If the provisions of the trust provide that property is to be held in trust for the benefit of a certain beneficiary, then you, as Trustee, must hold and administer the property subject to the standards and duties required by law.
  • Trustees are required to maintain accurate records regarding the trust property, including any additions of principal and income. Sometimes, partial distributions to beneficiaries are allowed to accommodate unexpected liabilities. Final distributions to the beneficiaries should be made only when you are certain that all liabilities have been received and paid. If you make complete distribution too early and an unexpected obligation such as taxes or a medical bill surfaces after such distribution, you will likely have a difficult time retrieving funds back from the beneficiaries to pay those expenses. If you distributed all of the trust assets without paying all of the creditors, you may be held personally liable for the shortfall.