Using Attorney in Trust Administration
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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
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• Expectation of the General Public• Expectation of the Court• Goal • Impact of Beginning Professionals versus
Experienced Professionals
Introduction
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• 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
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• Notice By Trustee – Attorney• Notice List• Heir search vs. Private Investigator• Bond
Trust AdministrationFirst Steps:
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• Expectation – PPF to handle• Attorney’s role is minimal• PPF should provide asset information to
attorney
Marshaling AssetsGeneral Issues
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• May be required to file Inventory & Appraisal• Utilize Probate Referee for Appraisal Process
Marshaling AssetsCourt Supervised
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• 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
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• Legal document preparation• PPF to drive process, provide attorney with
information
Marshaling AssetsAttorney’s Role
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• Notification to County Assessor • Preparation of Property Tax Documents• Affidavit of Death or other Deed to clear title
Real Property IssuesAttorney’s Role
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• Physical Control of the Property• Change locks• Notify Tenants of change• Maintenance Issues• Landlord – Tenant issues – may need attorney
Real Property IssuesPPF’s Role
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• Attorney to review listing agreement, contract• NPA to be sent by attorney
Real Property IssuesSales of Property
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• 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
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• Must have agreement regarding accounting• Court Format with all required Schedules• Original Statements
Accountings -Court Supervised
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• Must have agreement regarding accounting• Court Approval Desired?• Discuss format with attorney• Style Choices
Accountings –Non-Court Supervised
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• Consult with Attorney/CPA regarding Income taxes
• Sale Issues – CG, Property Tax, future ET• EIN• File Taxes – PPF responsibility
Tax Issues
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• 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
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• No Distribution without Attorney Approval• Duties to treat all beneficiaries equally
Distribution
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• Schedule of Distribution• Retention of Reserve• Timing for Distribution of Reserve
Distribution
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• Distribution – In-kind• Distribution following Sale of Assets• Tax issues
Distribution Options
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• 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
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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
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• Meet with your attorney up-front • Set forth parameters of who will take care of
what task
Clear Guidelines