Being chosen as the trustee to handle the trust of someone special says a lot about your character. The other party trusts you enough to keep various of his or her assets in your care until it is time for them to be distributed to the beneficiaries of the trust. However, it is smart to enlighten yourself on what is involved with being a trustee. There are legal obligations that you must abide by to stay out of a complicated legal situation, such as by making sure taxes are filed for the trust. Take a look at the content of this article for information that you should know about being a trustee:
1. Filing Trust Taxes
Just as with filing your personal income taxes each year, you will also be required to filed trust taxes. However, the process for both must be done properly if you don't want any mistakes made that triggers an audit by the IRS. There are certain forms that must be filled out to separate your personal taxes from what is included in the trust. The smartest thing to do would be to hire a trust tax accountant to handle all of the paperwork. Your responsibility will only be to file the taxes, but paying them is the responsibility of the beneficiaries.
2. Distributing Assets
You will be responsible for ensuring that the beneficiaries are granted specific assets. It isn't up to you in regards which assets are given to each beneficiary. You must abide by what the owner of the trust instructed you to do when it is time to distribute the assets. For example, if you are instructed to give one beneficiary a substantial amount of money over what other receive, it must be done. The beneficiaries can contest the trust, but there is nothing to worry about if you do everything right on your part.
3. Attending Probate Court
In the event that a beneficiary feels as though you are not abiding by what the owner of the trust desires, going to probate court might be necessary. It is also possible for a beneficiary to contest the trust if he or she believes it has been tampered with by someone. If you find yourself in such a legal situation, ensure that a probate lawyer is hired to assist. You might even want to consider the same lawyer that drafted the documents up for the owner of the trust. He or she will be able to assist with preventing the situation from turning into a long battle in court.
Contact a trust tax return service for more information and assistance.