Many people in Nevada establish trusts for a number of different purposes. When people die and leave trusts behind, they must be administered according to the provisions they contain. People who are tasked with administering a trust have a fiduciary duty to the trust beneficiaries.
Trust administrators must invest the proceeds of a trust so that they grow and can continue providing income to the trust beneficiaries. Trustees have the duty to make wise investment choices and may benefit by getting advice from investment advisers if the trust administrators are not financial professionals.
Administrators of trusts must also work to minimize income and capital gains taxes. They must provide annual statements to the beneficiaries who have earned taxable income from the trusts called K-1 statements. These individuals are also responsible for filing the annual income tax returns for the trust with the IRS by April 15. If the trust administrators fail to file the tax returns on time and pay the taxes that are owed, they may be held to be personally liable to pay the penalties and fees.
People who are interested in trust planning may want to talk to their estate lawyers about the goals that they want to accomplish by setting up trusts. Attorneys may help their clients understand the different options that they have and assist them with drawing up the documents. Lawyers may also assist their clients with choosing trust administrators who might be able to carry out the fiduciary duties that they will have. If someone has been named as the fiduciary of a trust, he or she may consult with an attorney for advice on the trust’s administration so that he or she may avoid making mistakes. Trust administration can be complex and may expose administrators to personal liability if they make mistakes.