A revocable trust is a trust that can be revoked or altered once created. This means that an individual who sets up a revocable trust -- a grantor -- can make changes to the original trust deed. Such changes include the removal and addition of property from the trust. A trust grantor must appoint a successor trustee to administer the trust after his death.
Provide written notice of administration. States like California and Florida require a successor trustee to provide beneficiaries of a trust with written notice of administration upon a trust grantor’s death. Obtain a complete list of the beneficiaries and legal heirs of the trust grantor in the original trust deed.
Identify and collect trust property. Since mail may contain financial account records, dividend checks, income tax returns and financial statements from which assets may be identified, start your search for assets in the trust grantor’s home. Private asset search firms can also assist in the recovery of missing and hard to find assets.
Account for all checkbooks, insurance policies, collectibles and real estate property. Ensure that all trust property is properly protected and secure from unauthorized use.
Take reasonable steps to bring a return on assets. There is not a one-size-fits-all formula for this. Examples include setting up interest-bearing accounts, renting or selling vacant real property and working with a financial planner to pursue attractive investment options.
Check that all assets are held in the trust’s name. Contact an estate attorney about re-titling any property that is not held in the trust’s name. The kind of asset involved will determine which instrument is used and what steps need to be taken to complete the process.
Hire an appraiser to appraise the trust’s assets. An accurate and up-to-date appraisal is required for tax reporting purposes.
Pay state and federal tax obligations and any outstanding debts. Visit your state’s legislative website for state tax information. Visit the Internal Revenue Service’s website for federal tax information. File a state and federal tax return annually. Pay private debts to the collecting creditor.
Maintain complete and accurate reports. This means maintaining a list of the assets that were in existence on the date of the trust grantor’s death and keeping track of the trust's financial accounts. Document your rate of compensation as well as the amounts paid to lawyers, financial advisors, tax attorneys, accountants and other outside parties hired to act on behalf of the trust.
Distribute assets while meeting the needs of beneficiaries. Create a plan of action that minimizes taxes. A tax attorney can update you on your state’s gift-giving laws. Relinquish trust property accordingly.
Charlie Gaston has written numerous instructional articles on topics ranging from business to communications and estate planning. Gaston holds a bachelor's degree in international business and a master's degree in communications. She is fluent in Spanish and has extensive travel experience.