Trust Assets

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A trust is a legal arrangement that allows a third party (known as a trustee) to hold assets on behalf of beneficiaries (see EstateExec Guide: Trusts for more information about trusts in general). Because a trust is a legal entity in its own right, its transactions and funds cannot be commingled with other legal entities... such as an estate.

Consequently, trusts require special handling within EstateExec:

If the Will Names a Trust as a Beneficiary

If the will names a trust as a beneficiary of the estate, you should list that trust on the Heirs tab, and, when the time comes, record distributions to that trust just as you would to any other heir.

Tip: Sometimes a decedent's will stipulates that all of his or her assets should automatically be placed into a trust upon their death (this type of will is commonly known as a pour-over will). However, there's really nothing "automatic" about it: any assets not already in the trust before death will still need to go through probate (unless the estate qualifies for small estate settlement), and the receiving trust is simply a beneficiary of the estate.

If the Estate Includes a Trust

If the estate includes a trust that existed at the time of death, we normally recommend listing it as an asset of type "Trust" on the Assets tab (don't worry, EstateExec is smart enough to understand that trusts are not subject to the normal probate process).

As an estate executor, you do not necessarily have any control over trusts (unless you also happen to be a trustee of the trust), but you similarly have no control over IRAs and life insurance policies with named beneficiaries, and it's usually still a good idea track all this information in one place (i.e., EstateExec). Moreover, some trusts (and IRAs, life insurance policies, etc.) must be included in estate valuation for tax purposes: see Guide: Trusts for more information.

Do NOT list the contents of any trust as individual assets on the Assets tab. A trust is a separate legal entity, and its internals are irrelevant to the estate. For example, if a trust contains a house and certificate of deposit, do not list the house or the certificate of deposit as separate assets within the estate. Similarly, do NOT enter detailed trust transactions such as interest earned, trust asset sales, expenses paid, or any other trust transactions in order to avoid commingling financial reporting.

For the purposes of the estate, all you need to do regarding a trust is to record its Value at Death, and any distributions (ensuring the Value Now of the trust has been updated before any such distributions, which you can do by clicking the Value Now column of the trust and entering an Adjustment Transaction).

All that being said, you may not want to include irrevocable trusts in an estate, since they are not subject to probate nor usually to estate taxes. If you do list an irrevocable trust as an estate asset, note that its value will be included in the overall estate value, even though such assets are normally excluded from estate tax regulations, and its cost base will be automatically stepped up (which would be incorrect for irrevocable trusts whose assets are not included in the estate for federal estate tax purposes: in such cases, you should manually override the default cost basis at death to be the actual cost basis prior to death).

Of course, a trust's trustee will need to track financials related to the trust... separate from the estate (see below).

Using EstateExec to Manage a Trust

If you are a trustee and trying to manage a trust, we recommend that you set up a separate EstateExec "estate" for handling the trust. Some of the Tasks will be irrelevant for a Trust (you can simply mark those N/A), and you can use the rest of EstateExec to track and manage all other aspects of the trust, from Contacts to Assets to Transactions to Distributions (note that distributions from a trust should be done with the Reason "Beneficiary").

See Using EstateExec for Trusts for information on configuring EstateExec for use with a trust, and recommendations for getting started.

Trust accounting can be tricky for inexperienced trustees, and you may find the EstateExec accounting reports quite helpful. If you are an estate executor, and have already licensed an EstateExec estate for handling the estate, you can contact for a discount on licensing additional estates for related trusts.

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