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What Do I Do With My Parent's Trust When They Die?

Eric H. Light, P.A. June 24, 2022

Old couple signing Trust DocumentSettling the final affairs of a deceased loved one often presents different challenges. When a person dies with a living trust, the successor trustee will be responsible for administering the trust, paying debts and taxes, and transferring trust assets to rightful beneficiaries. An experienced Florida estate planning attorney can enlighten you about the trust administration process and help you navigate crucial decisions.

At Eric H. Light, P.A., I'm committed to providing experienced legal counsel and reliable advocacy to clients in the legal matters of trusts and trust administration. As your legal counsel, I can help you understand your role as a trustee of a deceased loved one's trust and guide you through every step of the trust administration process. My firm is proud to serve clients across Boca Raton, Florida, and nearby areas.

Trust Administration in Florida

Trust administration involves the various duties and procedures through which a trustee or successor trustee manages trust assets in accordance with the provisions of the trust documents. When a trustor or grantor (a person who creates a trust) dies, the successor trustee will take over the trust, manage trust assets on behalf of the beneficiaries, and oversee the trust administration.

Roles and Responsibilities of the Trustee

Furthermore, the trustee has a fiduciary duty to the trust beneficiaries. Here are some of the duties and responsibilities of the trustee:

File Notice of Trust: A "notice of trust" is a formal notice provided by the trustee to the general public indicating that the grantor is dead. The trustee must file a notice of trust with the court of the county where the grantor lived at the time of their death.

Identify Beneficiaries: The trustee must identify the beneficiaries of the trust. Trust beneficiaries are chosen by the grantor. They may include a family member, spouse, minor children, close relative, or a charity organization. The trustee may notify beneficiaries of the trust in person or through the mail.

Pay Administrative Expenses: The trustee will pay expenses incurred during the administration of the trust from the decedent's trust assets.

Address Debt: The trustee will notify known and potential creditors of the grantor's death, evaluate and pay the valid claims, and settle all outstanding debts.

Tax Preparation: Once the trustee assumes trust management duties, they need to obtain a Federal Tax Identification Number (EIN) from the Internal Revenue Service (IRS). The trustee must pay all due taxes, file inheritance and estate taxes, as well as the trustor's final income tax returns.

Distribute Assets: Once all outstanding debts and taxes have been settled, the trustee will distribute assets to rightful beneficiaries according to the provisions of the trust documents.

Create a Reserve Fund: A reserve fund is a savings account that is often created to meet unexpected expenses, future costs, or other financial needs. The trustee can create a reserve fund to save money for a certain period upon completing trust administration. This can be used to pay professionals in the event of litigation due to trust administration disputes or other unforeseen expenses.

An experienced Florida trust attorney can guide you through every phase involved in the trust administration process, help resolve debts, and carry out your duties as the trustee, diligently and efficiently.

Do I Have to Pay My Parent's Debts?

No. If your parent dies, you are not personally liable for the deceased person's debts. The decedent's estate or trust will be legally responsible for settling their debts. In Florida, the executor or trustee will pay any unpaid debts from the estate's assets or trust assets, respectively.

How Eric H. Light, Esq. Can Help

Handling trust assets as the trustee to a decedent's trust often involve several complexities. Identifying beneficiaries, settling debts and taxes, and distributing trust assets to beneficiaries can make the whole process even more stressful. Therefore, getting detailed guidance from a knowledgeable estate planning attorney is imperative to navigate key decisions during trust administration.

At Eric H. Light, P.A., I have the diligence and expertise to assist and guide trustees and fiduciaries through the complexities of trust administration. As your legal counsel, I can enlighten you about your roles and responsibilities as a trustee and help you perform them seamlessly. In addition, Attorney Eric H. Light will outline a detailed checklist to guide you through the trust administration process and help distribute trust assets to rightful beneficiaries according to trust provisions.

Contact Eric H. Light, P.A. today to schedule a simple consultation with an experienced trust administration lawyer. I can offer you the personalized legal counsel, assistance, and strong advocacy you need to navigate intelligent decisions. My firm is proud to serve clients across Boca Raton, Florida, and surrounding communities.