Administration of Trusts
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Trusts have many uses. You can use a trust to protect a beneficiary who has special needs, has an addiction to drugs, alcohol or gambling, is in a bad marriage or simply cannot handle money. You can also use a trust to avoid probate or protect your estate if you need Medicaid for home care or nursing care. A trust can lessen your estate taxes or income taxes. A trust can also be very useful if you or a loved one no longer has the capacity to handle financial affairs.
There is a myth that having a living trust avoids all of the problems of a will. This is not true. A trustee has the same basic obligations as an executor. A trustee who takes his duties lightly may end up paying a heavy price out of his own pocket. As a trustee, you must preserve the assets of the trust for the benefit of the trust beneficiaries. You must pay the claims of creditors and all taxes. You must give accounting reports to trust beneficiaries showing what you did with the trust assets during the time you administered the trust. You must hold or distribute the assets of the trust in accordance with the trust document. You should consult with an attorney who has trust administration experience and receive advice regarding your obligations as trustee. With appropriate advice, you will not have to worry about the serious consequences of failing to properly perform your duties as trustee.