Page 77 - Successor Trustee Handbook

If the Trustor received any benefits under Medicaid, you should notify Florida’s
Department of Children and Families, in writing, of the Trustor’s death, as the
Department may file a claim for reimbursement of some or all of the benefits and you
will want to be sure there is no such outstanding claim prior to establishing and
distributing the reserve. (If a claim is made by the Department for reimbursement, you
should probably consult an attorney skilled in this area to determine the validity of thef
claim).

Certain legal documentation should accompany the final termination of a Trust
(and release of any reserve). You, as Trustee, should obtain written receipts from the
beneficiaries (or if the assets go to a Trust, from the Trustee). Depending upon any
limitations by state law, these receipts should include an acknowledgment that each
person has received any and all distributions due to him or her and releases the Trustee
from any further liability. In these receipts (or a “Final Settlement Agreement”), the
beneficiaries should promise to pay any legitimate Trust expenses that may surface after
their distributions; if for any reason you do not believe a beneficiary will fulfill this
promise when called upon, you may want to still maintain some Trust funds in reserve for
a reasonable period of time. You should consult with an attorney about this, as well as
about the transfer of assets other than cash. The actual transfer of assets may require
title transfer documents, such as assignments and deeds, for which you should have an
attorney prepare.

If, during the process of terminating the Trust, you as Trustee become aware of or
foresee any difficulties with the beneficiaries, any creditors, or other third parties, you
may wish to consult with an attorney and determine whether it may be appropriate to
file a petition with the Probate Court for approval of the final distribution and
termination of the Trust.

Finally, when a Trust is terminated, do not forget that “final” income tax returns may be
required for the Trust. Since the liability for taxes in the year of termination of the Trust
flows to the beneficiaries who receive distributions, you do not need to continue to hold
a reserve until these final returns are filed and any audit period passes.

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