How to Execute a Trust Agreement
A family trust is established to remove assets from a personal estate and avoid probate upon the death of the trust grantor. Regardless of how complicated the trust is, it is useless unless it is properly funded and executed upon the death of the grantor. Funds that are not placed in the trust by title change are considered part of the probatable estate. Where gaps in the trust exist, the successor trustee will have to deal with the probate courts to completely execute the estate.
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Instructions
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Obtain a copy of the trust if you don't already have one. This is available from the attorney who wrote it, or it will be kept on file by the deceased in his home or safe deposit box. When in doubt, ask for a copy of the trust from a bank representative where a trust checking account was held. Banks must maintain a copy of the trust for all accounts listed under the trust.
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Read the trust and confirm that you are the successor trustee and executor of the estate. Gather all account statements and property deeds related to the trust and the estate.
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Go to the probate court in the county where the deceased resided. File paperwork for an affidavit naming you as the executor of the probatable estate and noting the execution of the trust for all applicable trust assets.
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Provide notification of the death to all known beneficiaries and heirs listed in the trust or otherwise identified. Do this in writing and by way of an obituary as public notice in the event a long-lost relative emerges with a claim on the estate.
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Segregate assets that belong to the trust from those that don't. Follow probate court procedures for all assets not held in the trust.
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Appraise the estate and its individual items to determine debts, expenses and taxes owed. Pay all amounts owed before distributing assets to beneficiaries. Payment of trust debts may require liquidation of assets first.
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Transfer remaining assets to beneficiaries according to trust declarations. This may be through liquidation and distribution or title transfer of property. Follow the trust guidelines and obtain the proper paperwork from asset administrators or county deed offices.
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Close the trust by writing a summary of all actions taken, including payments, sales and distributions of assets. Notify the IRS of the trust closure by writing a letter stating why the tax identification number is no longer needed. Send the letter to: Internal Revenue Service, Cincinnati, Ohio 45999.
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Tips & Warnings
Assets in the probate portion of the estate are directed by a last will and testament and follow the directives of the probate trustee assigned to the estate.
