The successor trustee has a fiduciary obligation to marshal and safeguard trust assets. The key to successful administration is timely and complete asset collection. Information about the trust assets is vital for completing the federal estate tax return; therefore it is essential to determine the nature, extent, and title of the settlor’s assets as soon as possible. Early recognition of potential uncertainties can lead to a smooth and successful administration.

Steps to take include:

  • Formal appraisals of real and personal property. This is required to establish the new income tax basis and for estate tax purposes. Consider written appraisals for 1) real property, 2) tangible personal property (household furniture and personal effects, art, livestock, boats, planes etc.), 3) intangible personal property, and 4) business interests.
  • Identify any out of state real property to determine whether ancillary probate or summary administration proceedings for non-trust real property are needed.
  • Verify title to real property was held by decedent. Contacting a title company, or ordering copies of the last recorded deed to the property can achieve this and alert you to potential gaps in title, incorrect legal descriptions, or other problems.
  • Indentify and arrange for safekeeping of any personal property
  • Determine whether the settler maintained any safe deposit boxes with any financial institutions
  • Identify any assets subject to option agreements triggered by death or otherwise, or any real property in escrow or foreclosure at the time of settlor’s death. Also, any of the following assets includable in the estate by law
    • Gifts within 3 years
    • Retained interests (i.e. life estates)
    • Transfers with a retained reversionary interest
    • Revocable transfers
    • Powers of appointment
    • Life insurance proceeds, and
    • QTIP Property
  • Identify any prior transfer property that passed to the decedent through a taxable estate within 10 years before death to take advantage of the prior transfer property credit available for estate taxes paid with respect to prior transfers to the decedent.
  • Review gifts made during the lifetime of the decedent and determine whether any gift tax returns were ever filed.
  • Determine how to access the cash in any irrevocable life insurance trust that decedent may have established to provide for payment of estate taxes.