Administering a trust means overseeing assets for someone else when they are unable to do so themselves. Trust administration often occurs after a person dies, but it may take place while the person is still alive if they need an impartial third party to distribute assets. To administer a trust properly, it's important to understand what a trust does in the first place.
Why Is a Trust Needed?
When you pass away, the North Carolina courts initiate what’s known as probate. During the probate process, a court establishes the value of your estate, pays any parties who have a claim to your assets, and divides the remainder between your spouse and children.
Of course, most people don’t want the courts deciding where their hard-earned money goes. That’s why you want to handle your estate through your attorney’s office instead. Assets in a trust don’t go through probate, and offer these benefits:
- The process is private.
- Setting up a trust is often less expensive than the court costs of probate.
- Your assets go where you want them.
Probate is a public process that draws creditors and often results in little or nothing left over for your family. The process also isn’t helpful if you specifically want some of your assets to go to a charity, or if you have a special needs child who requires someone else to oversee monetary concerns. Appointing someone to administer your assets in a trust keeps the courts out of the equation and makes sure your wishes are followed, but only if the trust is administered properly.
Who Needs Legal Assistance With Trust Administration?
You need the help of an experienced estate planning attorney when setting up your own trust, but it can be even more important to seek legal advice if you are appointed as a trust administrator. Under North Carolina law, you are required to administer the trust in “good faith, in accordance with its terms and purposes and the interests of the beneficiaries.” The law also stipulates that the administrator of a trust must oversee the assets according to these specific legal principles:
- Prudent administration
These terms essentially mean that you must make decisions in the best interests of the person who created the trust, even when those decisions conflict with your own financial gain. That can be more difficult than it seems, and a lawyer offers assistance in understanding your duties to make sure the law is followed.
Do You Have Questions About Trust Administration? Contact Our Estate Planning Attorneys Today
Our experienced Wilmington estate planning & probate attorneys are ready to help you create or administer a trust. Get in touch to start a free 15-minute consultation so we can determine what kind of trust is right for your family.