Choosing the “Administrative Trustee” Takes the Burden off Your Family at your Death

Originally published on January 15, 2018. Updated April 3, 2023

A Professional Administrative Trustee can smooth out the wrinkles before passing the torch to the family or trust company.

I present the option to clients that they appoint an independent person to be the administrative trustee. Most clients are now adopting this approach. Here’s why:

There is a period of time and, in our case, a section of most trusts we draft, called the “Administrative Trust,” following your death. This is a tedious time when the trust needs to be administered efficiently before it is passed on to the heirs.

The administrative trustee needs to:

• • Locate, collect, and inventory assets and liabilities
  • Decide on what bills should be paid and when following the priorities provided for in your trust and in the law
  • Prepare income taxes, pay taxes
  • Account for trust assets
  • Communicate transparently with all beneficiaries
  • Make interim distributions to beneficiaries or their trusts
  • Establish tax-sheltered shares (“marital” and “family” subtrusts)
  • Establish and set up inheritance trusts for beneficiaries, and
  • Ultimately turn the reins over to the successor trustees, whether in your case
    • your spouse, or
    • your children, or
    • your family member trustees, or
    • your family members, or
    • corporate/professional trustees.

This period of time is replete with forms and details, crucial for accounting for all the assets and loaded with making decisions and carrying through on them in a timely manner.

It is a time for delegating to family members certain tasks and locating and hiring professionals, like financial advisors, CPAs, and appraisers, to preserve family personal effects, and to sell, reallocate, and in some cases purchase assets for the trust.

This is a stressful time for family members generally and family trustees in particular. There is also typically a steep learning curve to come up to speed on what needs to be done.

The Administrative Trust is an intensive process from the legal, accounting, tax, and financial perspective, requiring that you or your family rely heavily on good “back-office” support. It is also time that should be “high touch” – when the family needs a friendly office to deal with.

For this reason, we have made a deliberate effort to make ourselves available to serve as the Administrative Trustee. We think it will be good for our client’s families. Having our office serve as the trustee can alleviate a lot of strain on the family for the time, effort, learning, personal expense, the tension, and even the bitterness that develops among family when important jobs are being carried out – or not. Admittedly the family may pay more for our services than they might if we are simply advising family members as trustees, but the results, will be worth it.

I honestly believe that many families will pay less for professional services as a result of our serving in this capacity because of the increased efficiency of running the trust(s).

At the end of the administrative period, we distribute the trust or turn the running of the trust or trust shares over to family members or institutional trustees who our clients have appointed to serve for the long term.

Typically, a family member would still serve as the Personal Representative (Executor) of the estate under your will and would work with our team in a seamless fashion.

Download or print out Borchers Trust Law Group’s free checklist of tasks an administrative trustee needs to avoid frustration.