Michigan Trust Administration Summary Lawyer
When a couple establishes a living trust, they usually establish themselves as its initial trustees and begin to register assets in the name of the trust. When the first spouse dies, the trust is commonly split into two sub-trusts, Trust A and Trust B, with the surviving spouse usually the trustee of each.
Trust A is a revocable trust, like the original living trust was, and contains the surviving spouse’s assets. Trust B contains the maximum amount allowable as exempt by federal estate law or the total assets owned by the first spouse who died. Unlike Trust A, Trust B is irrevocable.
When the surviving spouse dies, the various trusts need to be carefully administered. The trustee or trustees of these trusts have many legal responsibilities when distributing the assets of these trusts, and litigation can result if these responsibilities are not properly followed. The trustee or trustees may be personally held liable for damages by the trust’s beneficiaries, and the IRS may get involved and attack the trust.
Because of these very real possibilities, any person who acts as trustee or co-trustee for any trust should retain an estate planning attorney and a qualified accountant before doing anything. The trustee needs the advice and experience of someone who is familiar with the law and the administration and handling of trusts in Michigan as an advisor, and that advisor should be impartial.
While these pages attempt to inform you about how a living trust is created and disbursed, they are no substitute for the qualified assistance a tax or legal professional can provide. The person who becomes the successor trustee most often receives the trusts when his or her parents have died. This emotionally trying time may make it difficult to concentrate, and an experienced advisor may insure that all the necessary steps are properly done.