A trust settlement checklist is a must-have if you have been named as successor trustee on a trust. After the death of an individual, their estate plan needs to be administered. This process is called post-mortem administration and is a series of tasks performed by a fiduciary named in the estate planning documents. The fiduciary of a trust is called a successor trustee.
Serving as the successor trustee of a trust is not a role to be taken lightly. Administration can be an arduous and time-intensive project even for a professional trustee, let alone an individual trustee who may not be familiar with the fiduciary duties and liabilities they are undertaking. If you have been named as successor trustee on a trust, the following checklist may serve as a guide of some of the duties you may perform in settling the trust and carrying out the wishes of the decedent.
16 Steps to Settle a Trust and Distribute Assets Outright to Beneficiaries
- Locate estate planning and financial documents including, but not limited to, wills, trusts, powers of attorney, financial statements, and tax returns.
- Obtain multiple certified copies of death certificates through funeral homes or mortuaries. You can also order death certificates through your state’s vital record office.
- Obtain a Federal Tax Identification Number (TIN) through the IRS. Visit IRS.gov to apply for a TIN.
- Contact an attorney to draft a formal acceptance of you accepting the role as trustee and file a notice to creditors.
- Contact the decedent’s professional team (attorney, financial professionals, CPA) to notify them of the death of the decedent, your appointment as trustee, and discuss your role in the administration of the trust. The decedent’s professional team will be a valuable resource to help gather all the necessary documents to help you do your job. You will want to provide copies of the death certificates to the decedent’s professional team.
- Consult with the decedent’s CPA to prepare the decedent’s final tax return and the trust tax return. Discuss with the CPA whether an estate tax needs to be filed.
- Review the will or trust and identify the beneficiaries; make a list of their names, addresses, and contact information. Read the section of the trust about your powers and responsibilities.
- Contact the post office to forward all mail to you as the successor trustee.
- Cancel all services and utilities for the decedent. Pay any outstanding debts, including credit card bills.
- Contact financial institutions to obtain access to the decedent’s bank and financial accounts. You will need to reregister bank accounts under your name as trustee.
- Take an inventory of trust assets to determine which assets are titled in the trust and which assets may need to be administered as part of the decedent’s probate estate. Determine and update the cost basis of each asset at the date of death (step-up in basis).
- Value any illiquid investments such as real estate, automobiles, art, business interests, etc.
- Contact insurance companies and file any claims for life insurance benefits.
- Obtain any information about retirement plans due to beneficiaries. Also, file any claims for social security benefits.
- Begin distributions of any tangible personal property. Look to see if there is a list, Personal Property Memorandum, or specific instructions.
- Distribute remaining assets to the beneficiaries per the trust document.
If you have any questions about the above trust settlement checklist, please email firstname.lastname@example.org or call 702-998-3700.