How Does Trust Administration Work In Massachusetts?
A trust is a common estate planning tool that can offer a number of different advantages. A trustee is appointed to manage the trust on behalf of beneficiaries. Trust administration can be complicated. There are specific rules and regulations for it in Massachusetts. Within this article, our Norwood trust administration lawyer highlights key things to know about how the process works in Massachusetts.
Trust Administration Starts With The Trust Itself (Documents Matter)
Trust administration begins with the actual trust document. It is crucial that trust documents are drafted by an experienced attorney. Along with other things, the trustee must identify the settlor’s instructions, confirm who the current beneficiaries are, determine whether the trust is revocable or irrevocable, and take control of trust property. Massachusetts law gives the terms of the trust substantial force. With that being said, the law still matters. A trust administrator must comply with fiduciary duties under Commonwealth law (Massachusetts Uniform Trust Code, G.L. c. 203E).
The Trustee Owes Fiduciary Duties To The Beneficiaries
A fiduciary duty is the highest level of care under Commonwealth law. In Massachusetts, a trustee does not act as a personal representative for the settlor’s family. A trustee acts as a fiduciary for the trust beneficiaries. In other words, a trustee must administer the trust in good faith, in accordance with its terms and purposes, and in the interests of the beneficiaries. Under § 802, the trustee owes a duty of loyalty. That means the trustee generally cannot use trust property for personal benefit, favor one beneficiary for improper reasons, or enter self-interested transactions without authority.
Note: Massachusetts law also requires prudent administration. Under G.L. c. 203E, § 804, a trustee must administer the trust as a prudent person would, considering the purposes, terms, distribution requirements, and circumstances of the trust.
Trust Beneficiaries Have Information and Accounting Rights
Trust administration requires communication. Under Massachusetts law, a trustee must keep qualified beneficiaries reasonably informed about trust administration. Unless unreasonable under the circumstances, the trustee must promptly respond to a qualified beneficiary’s request for information related to the trust.
Beyond that, Commonwealth law imposes specific notice and accounting obligations. Within 30 days after accepting trusteeship or after the trust becomes irrevocable, whichever occurs later, the trustee must inform qualified beneficiaries in writing of the trustee’s name and address. The trustee must also provide accounts at least annually to distributees and permissible distributees of trust income or principal.
Distribution, Tax, And Court Issues Must Be Handled Properly
After the trustee identifies assets and beneficiaries, the trustee must pay valid expenses, evaluate creditor issues, handle taxes, and make distributions under the trust terms. Some trusts require immediate distribution. Others continue for children, disabled beneficiaries, surviving spouses, or tax planning reasons.
Call Our Massachusetts Trust Administration Lawyer Today
At Fisher Law LLC, our Massachusetts trust administration attorney has the specialized knowledge and experience that you can rely on. If you have any questions about trust administration, please do not hesitate to contact us today for a strictly confidential initial consultation. Our firm provides trust administration services throughout the Greater Boston area.
Source:
malegislature.gov/Laws/GeneralLaws/PartII/TitleII/Chapter203E/Section804
