COVID-19 Update: You can do Your Planning From Home

Articles Posted in Trust Administration

The administration of a trust that has become irrevocable, usually due to the death of its creator.

Choosing a trustee to manage a Colorado trust after someone has died may seem like a simple decision; however, much thought should be put into it. From keeping a detailed record of trust account activity to reporting the income tax liability of the trust, performing the duties associated with being a trustee can often be both overwhelming and immensely important. While the first instinct might be to pick a friend or family member to serve as trustee for the estate, there are compelling reasons why a professional trustee should be chosen instead.

Managing an estate can often be very technical and time-consuming. Because of this, there are factors to take into account when selecting a trustee:

Cost

It may seem logical that having a family member serve as a trustee would be cheaper than hiring a professional; however, this is not often the case. Individual trustees, unlike fiduciary institutions, must hire other professionals like attorneys and CPAs to help them perform estate-related duties. These costs are often unexpected and not included when calculating the overall cost of a trustee. On the other hand, corporate trustees often provide these services in house and are bundled into a comprehensive fee.
Additionally, inexperienced trustees will often forget that the residence of a trustee determines the income taxation of a trust and its relevant state law. On the other hand, professional trustees may also have an office in a state that will avoid state income tax on the estate.

Continue Reading

Justia Lawyer Rating
Super Lawyers
Colorado Bar Association
Wealth Counsel
Avvo
Avvo
NAELA
SCInstitute
Boulder County Bar Association
Contact Information