Trusts are used in estate planning for a number of purposes including estate tax planning, providing confidentiality of terms, and providing long term management of wealth.
Our firm’s trust administration work involves lifetime trusts created by individuals to protect assets during their lifetime and ensure that those assets are preserved for their heirs when they pass away. Phelan, Frantz & Peek’s lawyers provide support, guidance, and expertise in advising individuals on the types of trusts that should be created to achieve the trust creator’s objectives. As experienced trust administrators, we will help you understand and navigate the process of creating a trust and understanding the legal obligations of the trust entity.
When the trust creator passes away, our trust administration work dovetails with our estate administration practice. The primary difference between trust administration and estate administration is that the latter involves probate. Assets maintained by a decedent in a living trust do not go through the probate process. Phelan, Frantz & Peek helps trustees determine how trust assets are to be maintained and/or distributed after the trust grantor has died.
Because trust administration does not involve lengthy court proceedings, beneficiaries will receive their inherited assets much more quickly. Further, trust administration can be less expensive, time-consuming, and stressful for the successor trustee. It is also a more private process. Wills become a matter of public record once they enter the probate process, but because there is no need to involve the court in the trust administration process, trusts do not need to be made public at any time.
The nuts and bolts of trust administration require the services of an experienced trust administration lawyer. At Phelan, Frantz & Peek, we understand the tax obligations of a trust, the implications for life and estate planning, and can manage the tax filing process for you, as well as help you ensure the assets within the trust are properly distributed according to the trust document. Contact us at today to discuss your trust administration needs. We look forward to speaking with you.
Trust Administration Case Study
Trust Administration Case Study
Mr. and Mrs. V were in their mid-70s and healthy when they came to Phelan, Frantz & Peek. Mr. V was in the process of retiring from a consulting position and the couple was thinking about the legacy they would leave to their family. At the time, Mr. and Mrs. V had 2 adult children and 3 grandchildren. They owned two homes – one in a suburban residential neighborhood in New Jersey where they raised their family and one at the New Jersey shore. Their children and grandchildren spend a significant amount of time at the shore house and Mr. and Mrs. V want to make sure that it stays in the family for the use and enjoyment of many generations.
Mr. and Mrs. V also knew that if one or both of them were to require long-term health care, it could quickly deplete their assets. Further, they had heard that in order to qualify for Medicaid to supplement the cost of long-term health care, they would need to “spend down” their assets.
After an analysis of their total assets and a thorough discussion about their relationship with their children and their legacy desires, Phelan, Frantz & Peek lawyers recommended that Mr. and Mrs. V place their shore home in an irrevocable trust, naming their adult children as both the trustees and beneficiaries of the trust. By doing so, Mr. and Mrs. V essentially made a lifetime gift of the shore house to their children. Because Mr. and Mrs. V did not need to qualify for Medicaid until more than five years after the date of the gift, the shore house was not considered an asset for purposes of their Medicaid application. Accordingly, the shore house was able to stay in the family for years to come.