People create trusts for a multitude of reasons, mostly to assure that their assets are used in a matter as they have laid-out. This could include providing financially for a spouse until his or her passing, providing for grandkids’ college needs or just making sure that the assets are distributed correctly to their loved ones. Trusts can be complex legal documents. Once the grantor dies, all of the provisions contained in the document must be followed. It is the trustee’s job to make certain all of the provisions of the trust are carried out.
If you now have found yourself as a trustee for a trust, you must take your new job very seriously. You now have a legal liability to all the beneficiaries of that trust. The trustee is simply the person in charge of handling the business of the trust. This may include such things as making distributions of money or assets to beneficiaries; managing investments; renting or selling real estate owned by the trust; and any other financial dealing.
The bookkeeping and tax return preparation are of utmost importance for trusts. The trustee will need to maintain a proper accounting of how assets were distributed in case there was ever a question as to if the intentions of the trust were carried out.
Preparing the annual tax return for the trust is also the responsibility of the trustee. It is very important that the firm, who prepares your trust tax return, makes sure all the accounting and tax requirements of the trust document have been met. It is the trustee’s legal responsibility to make sure this done. So, as a trustee of a trust, you need a firm you can depend on and place confidence in to help you make sure everything is done right.
Cruise & Associates is a Nebraska-based accounting firm that has been preparing trust tax returns for over 20 years and is a leader in trust income tax return preparation.