Distributing Trust Assets

December 5th, 2013 by admin No comments »

One of the many duties of a successor trustee is distributing the assets from the original trust to the appropriate beneficiaries. Before this can happen, there are several steps that must be followed.

First, within 60 days of the date of death (or within 60 days of the second spouse’s death if the trust is in relation to a couple), all beneficiaries of the trust and heirs at law must be notified in writing. This notification is specifically worded and, if any of the trust beneficiaries request it, a copy of the trust as well as all of its amendments must also be provided to them. Any party who receives this notice has 120 days to contest the original trust.

The assets in the original trust may be sold. Or, if all of the parties agree, the assets can be divided among them. For example, one beneficiary may want the real estate while another may want an equally valued mutual fund. If, however, an agreement cannot be reached among all parties, the assets of the trust will be divided equally, with each beneficiary receiving their equal share of each individual asset from the trust.

A detailed list of all the trust assets must be created once an agreement has been reached by all beneficiaries with regard to the division of trust assets. After this list has been agreed to and signed by all parties, the assets must be re-registered in the names of the beneficiaries who will receive them. In addition, each financial institution that holds title to these assets must be notified of the re-registration. For real estate, a new deed must be created for each parcel of property.

In addition, an annual accounting of the trust needs to be filed with all of the beneficiaries, as well as upon a change of trustee or the trust termination. This accounting must show which assets were held in the trust at the date of death, as well as the value of the assets on the date of death and their current market values.
There are some trusts that stipulate that the trustee may not distribute the assets for a specific number of years. In cases such as this, the successor trustee will be responsible for investing the trust assets and making distributions to beneficiaries in the future.

In any case, a successor trustee has a fiduciary responsibility to manage the trust solely for the benefit of the trust beneficiaries. This means the originators of the trust, if alive but incapacitated, and for the designated beneficiaries upon the trust originators’ deaths.

It is advisable to work with an estate planning attorney throughout this process. The advice you receive can ensure that you are following the process in the correct manner. With the many steps involved that pertain to asset distribution, it is a good idea to work with someone who knows the process.

Managing ones Trust is an enormous undertaking that requires proper planning and diligence to minimize trust issues.

Research has shown that the top reason for creating an estate plan is that parents want to make sure that their hard-earned savings are distributed fairly and smoothly. They want to minimize any difficulties their families may have in inheriting. They want to make sure that their intent is clear. » Read more: Distributing Trust Assets

Senator Kennedy’s Legacy – The CLASS Act

December 5th, 2013 by admin No comments »

One of the most important pieces of the recently enacted “Patient Protection and Affordable Care Act” is the “CLASS Act“, which stands for the Community Living Assistance Services and Supports program. Authored by Senator Ted Kennedy and others, it creates — for the very first time — a long term care insurance plan to help those with functional impairments pay for necessary care at home or in their communities. While the daily benefit is limited, the CLASS Act will ultimately help many continue to live at home or in assisted living facilities, rather than be forced prematurely into a nursing home in order to qualify for government assistance. Some key features of the program are:

(1) enrollment is open to those who are employed and choose to make voluntary monthly contributions to the program, and there is no underwriting exclusion based on pre-existing conditions; enrollment will open January 1, 2011;

(2) eligibility kicks in only after the individual has been enrolled in the voluntary payroll deduction program for 5 years, but the payout will not begin until 2017;

(3) benefits will be a minimum of $50/day but be scaled up as high as $75/day, depending upon the degree of impairment, and there is no lifetime “cap” on payout;

(4) benefits will coordinate with government assistance from the Medi-Cal program (called “Medicaid” in many states), such that CLASS benefits will have no effect on eligibility for Medi-Cal, Medicare, Social Security Retirement or Disability benefits, nor SSI. In fact, persons in nursing homes who qualify for CLASS benefits will be able to retain 5% of their daily or weekly cash benefit without seeing a reduction in their Medi-Cal subsidy.

Unfortunately, because of the 5 year vesting requirement and the companion requirement that the individual be employed for at least 3 out of those 5 years, most currently retired seniors will not see any direct benefit from the program. » Read more: Senator Kennedy’s Legacy – The CLASS Act