Trust Administration


Upon the creation of a trust by a grantor, the operation of the trust is handled by the trustee. The trustee will manage the investments of the trust and make distributions to the beneficiaries according to the provisions of the governing trust document. Trust administration requires careful attention to the provisions of the trust document and detailed and accurate accountings to account for the trustee’s actions. Klug Law Office PLLC guides trustees through their administrative duties, timing of distributions, and prepares accountings and fiduciary income tax returns to ensure the trustee is in compliance with their obligations both legally and under the provisions of the trust.

Klug Law Office PLLC represents trustees administering trusts of multinational families with assets in multiple jurisdictions. Dealing with the laws of more than one nation is complex, it is important the trustee is properly advised to ensure compliance with all of the trustee’s responsibilities and to avoid any traps. Klug Law Office PLLC has extensive experience working with trustees of domestic and international trusts that hold assets in multiples jurisdictions, including closely held foreign companies, and our firm is well suited to guide such trustees through the steps to make distributions, comply with each countries laws, prepare proper accountings, and handle or coordinate any required tax filings.

Corporate Trustee Representation

Klug Law Firm PLLC represents financial institutions that serve as trustees of trusts typically with significant assets. Our firm represents corporate trustees to ensure they follow all of their legal obligations in the administration of the trust. Klug Law Firm PLLC is also experienced in handling complicated fiduciary income tax returns including trusts with multiple shares or trusts with foreign beneficiaries.

Klug Law Firm PLLC represents corporate trustees of trusts with foreign beneficiaries, which can significantly complicate the administration process. For example, it is typical for trusts to have a provision stating the corporate trustee is responsible to ensure the payment of inheritance taxes. The US and almost all states in the US do not impose an inheritance tax, but with the exception of common law countries like Canada and the United Kingdom, most other countries around the world are civil law countries and impose an inheritance tax. An inheritance tax is a tax on the recipient of the assets from a trust or estate. For example, a country may require the payment of the inheritance tax while the assets are still held in trust or require the trustee to make a special informational filing, the non-filing of which is typically subject to penalties in those countries.To further complicate matters, most civil law countries do not recognize the concept of a trust, so it is important for the trustee to understand how holding assets in the trust impacts the foreign beneficiaries. Through a network of professionals in countries around the world, our firm is able to coordinate legal opinions in the beneficiary’s resident country to ensure legal compliance, inheritance taxes are paid, and all required filings are completed.

There are also tax planning opportunities when there are foreign beneficiaries of a trust. A foreign beneficiary is not subject to tax in the US on US source capital gains and interest. If the trust instrument allows, distributions to foreign beneficiaries can be used to remove income from US federal taxation. It is
also important for the corporate trustee to understand their tax withholding obligations on distributions to foreign beneficiaries. Klug Law Office PLLC works with corporate trustees to identify tax planning opportunities, handle the withholding tax compliance, and prepare and file the fiduciary income tax return
to properly report the income of the trust.