using attorney in trust administration

Leslie Yarnes Sugai

How to use an Attorney

Effectively in a Trust

Administration Matter

16th Annual PFAC Annual Educational Conference

May 4-7, 2011Hyatt, Monterey

750 University AvenueSuite 140

Los Gatos, CA 95032(408) 354-0200

www.css-lawfirm.com

2

• Expectation of the General Public• Expectation of the Court• Goal • Impact of Beginning Professionals versus

Experienced Professionals

Introduction

3

• Attorney to review Trust, Case File and Background

• Attorney to petition for instructions for clarification of role

• Determine your role and duties as Trustee

Case Evaluation

4

• Notice By Trustee – Attorney• Notice List• Heir search vs. Private Investigator• Bond

Trust AdministrationFirst Steps:

5

• Expectation – PPF to handle• Attorney’s role is minimal• PPF should provide asset information to

attorney

Marshaling AssetsGeneral Issues

6

• May be required to file Inventory & Appraisal• Utilize Probate Referee for Appraisal Process

Marshaling AssetsCourt Supervised

7

• PPF to appraise assets as of date of appointment or date of death (if applicable)

• Establishes carrying value of assets• May not represent income tax basis of asset

Marshaling AssetsNon-Court Supervised

8

• Legal document preparation• PPF to drive process, provide attorney with

information

Marshaling AssetsAttorney’s Role

9

• Notification to County Assessor • Preparation of Property Tax Documents• Affidavit of Death or other Deed to clear title

Real Property IssuesAttorney’s Role

10

• Physical Control of the Property• Change locks• Notify Tenants of change• Maintenance Issues• Landlord – Tenant issues – may need attorney

Real Property IssuesPPF’s Role

11

• Attorney to review listing agreement, contract• NPA to be sent by attorney

Real Property IssuesSales of Property

12

• PPF to obtain control of mail• Credit report for Decedent• PPF to pay expenses unless insolvent• Discuss Notice to Creditors with Attorney

Debts and Creditor Issues

13

• Must have agreement regarding accounting• Court Format with all required Schedules• Original Statements

Accountings -Court Supervised

14

• Must have agreement regarding accounting• Court Approval Desired?• Discuss format with attorney• Style Choices

Accountings –Non-Court Supervised

15

• Consult with Attorney/CPA regarding Income taxes

• Sale Issues – CG, Property Tax, future ET• EIN• File Taxes – PPF responsibility

Tax Issues

16

• In litigation matters, fees for all parties are expected to be higher

• Depends on PPF’s role – are you a party or the neutral?

Litigation

17

• No Distribution without Attorney Approval• Duties to treat all beneficiaries equally

Distribution

18

• Schedule of Distribution• Retention of Reserve• Timing for Distribution of Reserve

Distribution

19

• Distribution – In-kind• Distribution following Sale of Assets• Tax issues

Distribution Options

20

• Less work, less handholding and less explanation required for PPF clients

• Cases may be more complex, may require more complex legal reasoning

Attorneys’ Expectations from Professional Fiduciary Clients

21

PPF

• Marshal Assets• RP Control• Pay Expenses • Accounting

Attorney

• Legal Issues & Documents

• Document Review

Both

• Tax Issues• Creditor Notice• Distribution • Sale of assets,

issues and Notice

Checklist

22

• Meet with your attorney up-front • Set forth parameters of who will take care of

what task

Clear Guidelines