Harnessing Tech Automation to Manage Risk in Trust Administration 

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Trust administration can be a rewarding and profitable part of your law practice. It can strengthen your relationship with clients and their family members, allowing you to offer holistic estate planning services.  

However, trust administration does carry some risks, since it requires time, attention to detail, and care in guiding the fiduciaries through the complicated process. The fear of unhappy clients or malpractice claims should not deter you, though. Read on to discover how to manage risk in trust administration.  

Be Mindful of All Tasks and Deadlines 

Effective trust administration is marked by the timely handling of important tasks and multiple deadlines like probate proceedings, tax filings, and communicating with beneficiaries in a timely manner. This would be overwhelming for a client to handle alone, but it is possible with your expert help. You will also assist clients with the distribution of assets according to the trust guidelines. Locating, appraising, and transferring these assets can take a significant amount of time and effort. Fortunately, you can use a software solution like Wealth Tracx to streamline the process with effective task management and document automation. 

Be Organized and Prepared 

Preparation is key to being an effective advocate for your trust administration clients. Gathering and reviewing the relevant documents, along with an extensive interview with your clients, will set you up for a successful trust administration by giving you the following information: 

  • Date and place of death 
  • Memorial services 
  • Marital status 
  • Existence of estate plan 
  • Nominated trustees, personal representatives, and other fiduciaries  
  • Family members and family dynamics 
  • Decedent’s accountant and financial advisor 
  • Asset information 

Having this information will allow you to have a productive initial meeting with the client as you begin the process of trust administration. You may even be able to prepare some documents in advance of the initial meeting. You can make an agenda for the meeting to stay on track, as well as a chart outlining the parties’ responsibilities.  

Strong Communication 

Once you have laid the groundwork with preparation, the next important step is communication. Consistent contact ensures that nothing falls through the cracks and helps clients feel confident that their affairs are in good hands. In addition to staying in touch with the interested parties, communication should also include the following: 

  • Confirming the filing of the decedent’s will 
  • Notifying trustees and beneficiaries 
  • Obtaining tax identification numbers 
  • Preparing tax returns 

Twists and Turns of the Trust Administration Process 

Throughout the trust administration process, the various sources of legal authority, such as probate court proceedings; trust instruments; federal rulings and statutes; the internal revenue code; and state trust code provisions should be kept front of mind. It is crucial to keep clients informed of their various requirements and consequences. Fiduciary duties are another important aspect to keep clients informed of, as clients can become liable to trust beneficiaries and other creditors under certain circumstances.  

The trust administration process is an extensive one, and it can be divided into these seven stages: 

  • Intake: Collecting important information and documents 
  • Engagement: Ensuring a productive initial client meeting and producing correspondence to confirm the terms of representation 
  • Initial Administration: Creating a timeline, calendar, and reminder system for important trust administration tasks 
  • Asset Tracking: Recording the inventory, valuation, and disposition of assets and confirmation of liabilities 
  • Ongoing Administration: Settlement of expenses and liabilities; advancements to beneficiaries 
  • Tax Filing: Securing the proper tax forms and corresponding with the IRS 
  • Final Administration: Distributing the remaining assets of the trust and closing the trust administration 

Why Trust Administration Software Can Help Your Law Practice 

The best way to make the trust administration process successful is to streamline and automate the process with a secure and comprehensive software solution. Here are some of the things your trust administration software should do for you: 

  • Customizable task management 
  • Asset and liability tracking 
  • Distributions and allocations 
  • Beneficiary reports and ledgers 
  • Tracking inventories 
  • Automated task management and deadline reminders 

Fortunately, Wealth Tracx from WealthCounsel can provide you with all of these features in a turnkey software solution. It is a comprehensive solution designed to provide you and your staff with the necessary tools, documents, and resources to deliver trust administration services efficiently and profitably. Click here to learn more about Wealth Tracx.