Trust Administration Summary for Michigan Trustees and Families

Trust administration begins when the trustee’s role changes—such as after the death or incapacity of the original grantor—and assets must be managed or distributed according to the trust document. Michigan trust administration typically includes:

• Reviewing the trust instrument: Identifying controlling provisions, amendments, and determining whether the trust remains revocable or has become irrevocable.
• Locating and valuing assets: Identifying financial accounts, real estate, personal property, business interests, and ensuring everything is properly titled in the trust’s name.
• Meeting fiduciary and tax obligations: Trustees must comply with the Michigan Trust Code, prudently manage assets, and file any necessary tax returns.
• Communicating with beneficiaries: Trustees must provide required notices and maintain transparency throughout administration.
• Distributing assets and closing the trust: After all debts, taxes, and expenses are addressed, the trustee distributes the remaining assets as instructed by the trust.

When administration is handled correctly, the process protects beneficiaries, honors the grantor’s wishes, and reduces the risk of conflict or liability. Without proper guidance, trustees may encounter avoidable delays, tax issues, or legal challenges.

Even simple trusts can involve legal challenges. More complex trusts—such as those involving marital trusts, split structures, high-value assets, or multiple beneficiaries—require even more careful administration. Common issues include:

• Split trust arrangements: Many joint trusts divide into separate sub-trusts at the first spouse’s death, often creating one revocable trust and one or more irrevocable trusts. Managing each part correctly is essential.
• Irrevocable trust limitations: Irrevocable trusts come with strict distribution rules, limited trustee discretion, and heightened tax considerations.
• Potential trustee liability: Trustees may face personal liability for mismanaging assets, distributing property prematurely, or failing to follow the trust terms.
• Disagreements among beneficiaries: Disputes may arise about distributions, valuations, or trustee decisions.
• Improper coordination with other estate documents: Wills, pour-over clauses, powers of attorney, and beneficiary designations must align with trust administration.

Our attorneys help trustees navigate these complexities with structured guidance, clear documentation, and legally compliant strategies that minimize risk.

Trust administration is a legal process—not just an accounting or procedural task. Trustees have a fiduciary duty that carries significant responsibilities and potential consequences if handled incorrectly. Mihelich & Kavanaugh, PLC provides the support necessary to ensure administration is done properly, including:

• Interpreting trust language and confirming trustee authority
• Advising on asset management, valuations, and transfers
• Providing timelines, checklists, and summaries to keep administration on track
• Ensuring compliance with notice requirements, tax rules, and fiduciary duties
• Coordinating with financial advisors, accountants, and beneficiaries
• Minimizing risk and preventing disputes through accurate documentation and clear communication

We help trustees understand not just what to do, but why each step matters—ensuring the trust is administered efficiently, legally, and in a manner that honors the grantor’s intentions.

Once debts, taxes, and administration expenses are addressed, the trustee must prepare to close the trust. This often involves:

• Preparing a final accounting or summary for beneficiaries
• Retitling or transferring remaining assets
• Providing required notices
• Obtaining receipts and releases from beneficiaries
• Documenting closure for tax and legal purposes

When handled correctly, closing the trust protects the trustee from future claims and ensures all beneficiaries receive their distributions smoothly and without delays.

If you are responsible for administering a trust—whether a revocable living trust, an irrevocable trust, or a more complex multi-part estate structure—Mihelich & Kavanaugh, PLC is ready to assist. We provide clear guidance, organized administration summaries, and experienced legal support to help you fulfill your obligations confidently and avoid costly mistakes.

Call our office today or complete our secure online form to schedule a consultation. Let us help you navigate every stage of trust administration with clarity and accuracy.