Stepping into the role of successor trustee often begins with a practical question: Where do I find everything I need?
The trustee may need to confirm their authority, identify trust property, communicate with beneficiaries, manage expenses, address tax matters, and maintain records of every significant transaction. Gathering the right documents at the beginning can make those responsibilities easier to organize.
Every trust and administration is different, but the following checklist can help a successor trustee understand which records may be important and why they matter.
The Trust and Documents Establishing Your Authority
Begin by locating the complete trust agreement. Do not rely only on an unsigned draft, summary, or old copy.
The trustee may need:
- The signed trust agreement
- Every amendment or restatement
- A certification of trust
- The former trustee’s resignation, if applicable
- A death certificate if the person who created the trust has died
- Documents establishing incapacity if the trustee is taking over for that reason
- Contact information for any cotrustees
- Instructions concerning trustee compensation
- Records from the former trustee
Review the trust carefully to determine when the successor trustee’s authority begins. If the transition is based on incapacity, the trust may require specific evidence, such as written medical opinions or another determination described in the document.
A certification of trust may allow the trustee to provide banks and other institutions with important information about the trust and the trustee’s authority without sharing the entire agreement. However, the complete trust document is still necessary for understanding its instructions.
A Current List of Beneficiaries
The trustee should determine who qualifies as a current beneficiary, permissible beneficiary, or remainder beneficiary under the trust.
Gather:
- Full legal names
- Current mailing addresses
- Email addresses and telephone numbers
- Dates of birth for minor beneficiaries
- Information about a beneficiary’s legal representative
- Details concerning any beneficiary who has died
- Documentation of name changes
- Information about trusts created for individual beneficiaries
Do not assume that only the people receiving an immediate distribution need to be considered. The trust may create continuing interests for children, grandchildren, or other beneficiaries who receive property later.
Colorado law may require a trustee to provide certain notices and information to qualified beneficiaries. Depending on the circumstances, some notices may be due within 60 days after accepting the trusteeship or learning that a formerly revocable trust has become irrevocable.
An attorney can help identify which beneficiaries are entitled to information and which notices are required.
Records Showing Which Assets Belong to the Trust
A list of everything the deceased person owned is not necessarily the same as a list of trust property.
The trustee must determine whether each asset was legally owned by the trust or became payable to it. Helpful records may include:
- Recent bank statements
- Brokerage and investment statements
- Recorded deeds
- Vehicle or watercraft titles
- Business ownership documents
- Stock certificates
- Promissory notes
- Mineral-right records
- Insurance policies
- Safe-deposit-box information
- Records of valuable personal property
- Documentation concerning digital assets
- Prior trust accountings or asset schedules
The trust’s original asset schedule can provide a starting point, but it may not establish current ownership. Assets may have been purchased, sold, retitled, or omitted after the schedule was prepared.
The trustee should verify ownership using current account registrations, deeds, titles, and other reliable records.
Information About Assets Outside the Trust
The trustee may also need to understand which assets fall outside the trust, particularly when coordinating with a personal representative or another fiduciary.
These may include:
- Individually owned bank accounts
- Retirement accounts
- Life insurance with named beneficiaries
- Jointly owned property
- Transfer-on-death accounts
- Property passing through a will
- Assets discovered after death
An asset located among the deceased person’s records does not automatically belong to the trust. The ownership and beneficiary designation generally determine how it may be transferred.
Separating trust property from nontrust property helps prevent the trustee from exercising authority over an asset they do not control.
Date-of-Death Values and Appraisals
When a trust is being administered after death, the trustee may need reliable values for the assets owned by the trust.
Useful records can include:
- Account statements covering the date of death
- Real estate appraisals
- Business valuations
- Vehicle values
- Appraisals of jewelry, artwork, collections, or other significant property
- Records showing the cost basis of investments
- Purchase and improvement records for real estate
Values may be needed for tax reporting, accounting, insurance, sales, or distributions among beneficiaries.
Not every item requires a formal appraisal. An attorney, accountant, or appraiser can help determine when a professional valuation is appropriate.
Bills, Debts, and Ongoing Expenses
Before making final distributions, the trustee should understand the expenses and obligations that may need to be addressed.
Gather information concerning:
- Mortgages and other secured loans
- Property taxes
- Insurance premiums
- Utilities
- Homeowners or condominium association charges
- Business expenses
- Storage costs
- Professional fees
- Medical or care expenses
- Contracts and leases
- Pending claims or litigation
- Recurring automatic payments
The trustee should determine which expenses belong to the trust and which may be obligations of an estate, business, beneficiary, or another person.
Maintaining enough liquidity for taxes, professional fees, property expenses, and other obligations may be important before distributing trust assets.
Insurance and Property-Maintenance Records
Trust property may need to be protected throughout the administration process.
The trustee should locate:
- Homeowners or landlord policies
- Automobile and recreational-vehicle policies
- Business insurance
- Liability coverage
- Property inspection reports
- Maintenance agreements
- Security-system information
- Tenant records
- Keys and access instructions
- Contact information for property managers
Notify the appropriate insurer when ownership, occupancy, or management of property has changed. A policy written for an owner-occupied home, for example, may need to be reviewed if the property becomes vacant during administration.
The trustee should also document the condition of important property and address necessary maintenance while decisions about sale or distribution are pending.
Business and Entity Records
If the trust owns a business interest, additional information may be needed before the trustee can determine what authority they have.
Look for:
- Operating agreements
- Partnership agreements
- Corporate bylaws
- Shareholder or buy-sell agreements
- Stock or membership certificates
- Recent financial statements
- Tax returns
- Loan documents
- Employment agreements
- Ownership ledgers
- Succession plans
- Contact information for business partners and advisors
The trust document, business agreements, and estate plan should be reviewed together. An operating or buy-sell agreement may restrict transfers or establish procedures that affect what happens to the ownership interest.
Avoid making immediate promises to beneficiaries about the business until those documents have been reviewed.
Prior Tax Returns and Tax Identification Records
Trust administration may involve federal and state tax filings. The required filings depend on the type of trust, its assets, its income, and whether the person who created it has died.
The trustee may need:
- Prior individual income tax returns
- Prior trust income tax returns
- Gift tax returns
- Property tax records
- Forms reporting investment income
- Retirement-account tax records
- Records of estimated tax payments
- The deceased person’s Social Security number
- The trust’s employer identification number, if one already exists
- Information needed to obtain a new tax identification number
An accountant or tax professional can help determine which returns are required and what information beneficiaries may need for their own filings.
Contact Information for Professional Advisors
Previous advisors may hold information that is difficult to reconstruct from paper records alone.
Create a list of the:
- Estate-planning attorney
- Accountant or tax preparer
- Financial advisor
- Insurance agent
- Banker
- Business attorney
- Property manager
- Real estate professional
- Appraiser
- Bookkeeper
The trustee may hire appropriate professional assistance when needed. However, working with advisors does not eliminate the trustee’s responsibility to understand the decisions being made and monitor the administration.
Records the Trustee Should Create Going Forward
Some of the most important records will be created after the trustee begins serving.
Maintain organized documentation of:
- Property collected by the trustee
- Income received
- Bills and expenses paid
- Assets sold
- Investment activity
- Professional advice received
- Communications with beneficiaries
- Decisions involving discretionary distributions
- Property distributed to each beneficiary
- Trustee compensation
- Mileage and reimbursable expenses
- Tax filings
- Receipts, releases, and closing documents
Use a dedicated trust account rather than mixing trust money with personal funds. Save statements, invoices, receipts, and documentation supporting each transaction.
Colorado trustees are generally required to maintain adequate administration records and keep trust property separate from their own property. Certain beneficiaries may also be entitled to reports showing trust property, liabilities, receipts, disbursements, compensation, and asset values.
Create a Working Trust Administration File
Trustees do not need to keep every document in one physical binder, but the records should be organized and accessible.
A working file might include separate sections for:
- Trust and authority documents
- Beneficiary information
- Asset ownership
- Property valuations
- Expenses and liabilities
- Insurance
- Business interests
- Taxes
- Professional correspondence
- Distributions and accountings
Keep sensitive information secure. Digital records should be backed up and protected against unauthorized access.
If an important record is missing, note what has been requested, from whom, and when. That makes it easier to follow up and demonstrate the steps taken to locate the information.
Do Not Rush the First Distribution
Beneficiaries may understandably want to know when they will receive property. However, the trustee should not make a final distribution before understanding the trust’s assets, obligations, tax considerations, and distribution instructions.
A premature distribution could leave the trust without enough money to pay expenses or could result in the wrong property being transferred to the wrong person.
The trustee may be able to make a partial distribution in some circumstances, but that decision should be based on the trust document and the administration’s financial position.
For a broader explanation of fiduciary duties, asset management, and beneficiary communication, read what responsibilities a trustee has.
Begin Trust Administration With the Right Information
A successor trustee does not need to know every answer immediately. The first priority is to locate the governing documents, confirm the trustee’s authority, identify the trust property, and build an organized record of the administration.
Mason Law & Planning Group assists Colorado trustees with document review, beneficiary notices, asset administration, distributions, and other trust-related responsibilities. To discuss the next steps for a trust you are administering, contact Mason Law & Planning Group.