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Distribution by the Successor Trustee

Distribution of Trust A by Successor Trustee

Approximately nine months following the date of death, or after the federal estate tax return is filed, it's time to consider distributing Trust A's assets. The assets in Trust A can be sold or, if all the parties agree, they can be divided amongst them. For instance, one party may want the real property while another wishes the California tax exempt bonds, but normally the division is made based on the value of the assets as of the date of distribution. If no agreement is reached, the assets are equally divided between all the parties, with each receiving his or her equal share of every individual asset. Thus, each asset is divided by two, three, four, and so forth, depending on the number of beneficiaries.

A list detailing the allocation of the assets to the beneficiaries should be prepared once a division acceptable to all parties has been reached. This list will include each asset, and will show its value as of either the date of death or from the estate tax return. It will also specify how the asset will be allocated to the respective parties. After completing the list, it will be signed by the trustee or trustees, who will retain it in case any questions are made about how the assets were divided.

Sometimes, instead of being distributed, Trust A continues in whole or in part. When this occurs, the trustee or trustees need to re-register all the assets in the trustee's or trustees' names, keep records of any activity in the trust, provide the trust beneficiary or beneficiaries with annual accounting statements, and invest the funds in accordance with the trust's provisions and California law.

Re-Register the Assets in the Beneficiaries' Names

After the distribution list has been agreed to and signed, the assets need to be registered in the names of the various beneficiaries. Once again, each bank, credit union, brokerage firm and transfer agent need to be contacted and a transfer of title initiated, including a new deed created for each parcel of real property.

After this re-registration is accomplished, the assets are effectively delivered to the beneficiaries. A receipt from each beneficiary should be obtained by the trustee or trustees showing that the assets have been delivered.

Maintain Proper Accountings of Asset A

Unless the beneficiaries waive their rights to annual accountings, an annual accounting of the trust must be filed with the beneficiaries, and also upon a change of trustee or the termination of the trust. The accounting must show the assets held in the trust as of the date of death, along with both their values as of that date and their current market values. It must include any income received, any disbursements made, and any assets sold with their gain or loss indicated.

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Esquire Law Group is committed to answering your questions about Estate Planning, Probate, and Trust Administration law issues in Southern California.

We’ll gladly discuss your case with you at your convenience. Contact us today to schedule an appointment.

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