Successor Trustee FAQs After A Living Trust Maker's Death

What does a Successor Trustee do after the Trust Maker dies?

A Successor Trustee is the person appointed to take over management of a Living Trust when the Trust’s Maker (also called the creator, grantor, or trustor) becomes disabled or passes away. When the Trust Maker dies, the Successor Trustee’s primary job is the proper Administration of the Trust according to its terms.

What is Trust Administration? And how does it work?

In general, this means the Trustee must take control of the Trust assets, safeguard them, andthen distribute them to the Trust’s beneficiaries as the Trust document directs.

In practical terms, administering the Trust requires the handling of a wide range of Trustee duties. The Successor Trustee needs to collect and value all assets owned by the Trust, keep those  assets  managed  and  invested  prudently,  and  use   them   to   pay   any   valid debts, expenses and taxes before filing required legal documents and giving out inheritances. The Trustee must also act in the best interests of the  beneficiaries  at  all times, following the instructions in the Trust document and the law.

Unlike an executor of a Will (who handles a Probate Estate), a Successor Trustee typically administers the Trust without court supervision. This private Trust Administration process is often faster and more efficient than Probate, but it still requires careful attention to legal responsibilities to avoid any breach of fiduciary duty or mistakes that may result in the Trustee winding up in court and being held personally liable.

What are my first steps as Successor Trustee after the Trust Maker’s death?

In the days and weeks immediately following the Trust Maker’s death, a Successor

Trustee should focus on a few essential first steps to get the Trust Administration on track:

• Notify close family and friends and handle immediate funeral and burial obligations.
• Locate and review the Trust documents.
• Obtain death certificates.
• Secure the Trust assets.
• Manage urgent expenses and preserve estate value.

Throughout these first steps, the Trustee should keep records of everything you do. It can also be very helpful to consult an attorney early on for guidance, especially if you’re unsure about any step. By handling these initial duties promptly and carefully, you’ll fulfill your responsibilities and create a solid foundation that will speed up the rest of the Trust Administration process.

For more details, see our “Free Successor Trustee Checklist: Your First 30 Days After a Trust  Maker’s Death”.

Does a Living Trust have to go through Probate after the Maker dies?

(What’s the difference between Trust Administration and Probate?)

No, Probate is not required if the Trust was properly funded with the Maker’s assets. Probate is only necessary for assets whose titles were not transferred into the Trust. If the Trust holds title to the deceased’s property, those assets are distributed under the Trust’s terms without court intervention. However, any assets outside the Trust may still be subject to Probate unless they have designated beneficiaries or are jointly owned. Sometimes Probate may occur if there are unsettled beneficiary disputes or unclear Trust terms. Trust administration is typically faster than Probate, less expensive, and more private.

If some assets were not in the Trust, is a full, lengthy Probate Court process required to get them in?

Only the assets not titled in the Trust may need to go through Probate. If there was a “Pour Over” Will, that directs assets passing under the Will to be distributed to the Trust, this process may be short-cutted. An attorney may help you to use a “small estate affidavit” or file a “Heggstad petition” to permit the assets to be quickly transferred to the Trust and avoid a full Probate.

Who am I legally required to notify after the Trust Maker’s death?

You must notify Trust beneficiaries and legal heirs, the Social Security Administration,

Medi-Cal (what Medicaid is known as in California), banks, credit card companies, and utility companies. These notices prevent fraud, ensure a smooth administration process, and satisfy legal notice obligations.

In California, the Successor Trustee’s “Notice to Beneficiaries” must be made timely.

This notice includes basic information about the Trust and the right to request a copy of it. This gives beneficiaries the chance to know who is in charge, view the terms of the Trust and determine if they wish to raise any objections. It also protects the Successor Trustee by starting the time period during which certain claims must be filed. Therefore, it is wise to have a Trust Administration Attorney prepare this important legal document.

Do I need a new tax ID or bank accounts for the Trust?

Yes. The Trust typically becomes irrevocable upon the Maker’s death, and you’ll need to apply for a new EIN (Employer Identification Number) for tax purposes and to set up a new Trust checking account so you can manage and account for income and expenses. Your Trust Administration Attorney may help you take care of getting the EIN and provide you with a Certification of Trust to help open the bank account.

Do I have to pay the deceased’s bills and debts from the Trust?

Yes. The Trust is responsible for valid debts and expenses of the Maker. You’ll use Trust assets to pay final medical bills, funeral costs, credit cards, taxes, and other obligations before making distributions to beneficiaries. There may be an initial period where the

deceased person’s cash accounts may not be accessible. In that case you may pay for urgent items and later be reimbursed by the Trust. Working with a Trust Administration Attorney early in the process may avoid cash crunch complications.

What tax returns will I need to file?

You may need to file:

• The decedent’s final income tax return.
• A Trust income tax return (Form 1041).
• An estate tax return (Form 706).
• An exemption from local property tax reassessment.

A Trust Administration Attorney may identify what returns are necessary and help you prepare them or refer you to a qualified tax professional.

When should I distribute the Trust assets to beneficiaries?

Once debts and taxes are paid, assuming the Trust terms are clear, you can prepare a distribution schedule, a final accounting (unless it is waived by the beneficiaries), and obtain a signed Settlement Agreement and signed Receipts or releases from beneficiaries before disbursing funds or property. Your Trust Administration Attorney should help you with these critical steps in order to avoid you incurring personal liability – which could happen even after the assets are distributed.

How do I transfer assets from a Living Trust to beneficiaries? 

To transfer assets, the Successor Trustee will first need certified copies of the death certificate and an attorney drafted Certification of Trust (including a copy of it). Each asset type (real estate, bank accounts, stocks, etc.) may require different transfer procedures and forms. Real estate typically requires an affidavit of death and new deed. Financial institutions often ask for their own Trust certification forms. The Trustee must ensure all debts, taxes, and expenses are paid before distributing any remaining assets to the beneficiaries. It’s a step-by-step process that must follow the terms of the Trust and applicable state laws.

How long does it take to complete a Trust Administration? 

Most attorneys who handle Trust Administrations take 6 - 12 months or more. It may vary, depending on the number and nature of assets, whether there are real estate sales, the number of beneficiaries, how and when they are to receive their inheritance, any tax issues, a court Probate is needed, or other complexities such as beneficiary disputes. Given Kavesh, Minor, & Otis’ unparalleled experience in administering over 4,000 Trusts, we can usually complete the entire process more quickly within 4 - 6 months, and keep the beneficiaries happy.

What if beneficiaries disagree with me or someone contests the Trust?

Keeping clear records and communicating openly helps reduce the risk of disputes. Maintain transparency and follow the Trust terms. If a dispute or contest arises, consult a Trust Administration Attorney immediately. Problems may often be resolved without lengthy and costly court litigation. You have the right to use Trust funds to defend the Trust and your actions as Trustee, if you have acted properly within your prescribed fiduciaryduties.

What are my Fiduciary Duties?

As Trustee, you are a “fiduciary”. In other words, you are acting on behalf of others (theTrust beneficiaries) and you owe to them certain legal duties and obligations.

In order to fully understand all your duties and obligations, both the Trust document and specific state law may need to be consulted (which is another reason you should engage a California Trust Administration Attorney to assist you).

Here’s a quick list of some of your most important Fiduciary Duties:

• Identify and locate Trust assets.
• Control, maintain and preserve Trust property.
• Keep and account for Trust property, income and expenses separately from your own assets.
• Follow the terms of the Trust (particularly with regard to beneficiaries’ shares and how they are to be distributed).
• Invest Trust assets prudently.
• Communicate properly with beneficiaries.
• Act impartially (not in favor of yourself as Trustee or as a beneficiary).
• Avoid conflicts of interest (between you and the Trust and you and the beneficiaries).
• Defend claims against the Trust (including from beneficiaries).

Can I, as a Successor Trustee, get paid for my work?

Yes. Trustees are entitled to “reasonable compensation” for their time and effort unless the Trust states otherwise. You can also be reimbursed for out-of-pocket expenses incurred while performing your duties.

Can I be held personally liable as Trustee for mistakes or misconduct? 

Yes, out of your own pocket, if you breach your fiduciary duties or make mistakes. Avoid liability by acting in good faith, following the Trust’s terms, keeping good records, communicating with beneficiaries, and seeking professional guidance throughout the process, as necessary.

See our Free Report: The 10 Biggest Mistakes Trustees Make.

Am I required or do I need to hire an attorney or lawyer to administer a Trust?

Legally, you can do it alone – but why risk personal liability if you make a mistake? Most Trustees hire a Trust Administration Attorney to avoid costly missteps and mistakes. A Trust Administration Attorney can guide the Successor Trustee through the process, draft legal notices and filings, assist with tax reporting, and help resolve any disputes. Legal help is especially important if the Trust owns real estate, a business, or has multiple beneficiaries with competing interests.

Keep in mind the attorney’s fees can usually be paid from Trust assets, rather than out of your own pocket, and do not reduce the Trustee fees you may otherwise be entitled to.