California Trust Administration: the Challenges a Successor Trustee Faces

Our Experienced CA Trust Administration Lawyers Can Help Advise You if You’re Asked to Manage a Trust

Agreeing to administer a loved one’s trust is a powerful affirmation of your commitment to their legacy. However, serving as a successor trustee can be a big challenge—one that sometimes requires a deep understanding of California’s probate code and a firm grasp of complex accounting skills and management techniques. Even minor mistakes can have far-reaching consequences, causing trouble for the trust and prompting unrest among heirs.

If you feel over your head, it’s important to get help. The trust administration attorneys at The Law Firm of Kavesh, Minor & Otis, Inc. have spent decades helping families like yours work through difficult times. Here, we discuss what you can expect from trust administration and how we may be able to help.

The Rule of Successor Trustees in Trust Administration

After a California resident passes away, their estate and all of its possessions must be redistributed among the living—to creditors, to family, and to their heirs.

The actual process of succession is largely determined by the details of the deceased person’s estate plan:

• If the decedent died with no will and no estate plan, their estate is subject to the rules of intestate succession. In intestate cases, a California probate court will appoint or approve an executor to act on the estate’s behalf.
• If the decedent died with a will but no other arrangement, their estate is subject to the rules of ordinary probate. In most probate cases, an individual named as executor in the deceased person’s will is responsible for submitting petitions, paying creditors, and distributing inheritances.
• If the decedent established and funded a trust, the trust is responsible for distributing inheritances in accordance with its own terms and conditions. This process is termed trust administration. It typically occurs outside of court and is overseen by the person appointed to serve as successor trustee.

Successor trustees have many of the same duties as estate executors. Both must make a good-faith effort to honor the decedent’s intent and ensure that heirs receive their inheritances without unnecessary or unreasonable delay. However, whereas the duty of an executor lasts only for the length of probate, successor trustees can sometimes find themselves managing assets and mediating disputes for years to come.

In general, the successor trustee remains responsible for the trust until the trust has either exhausted its assets or has expired in accordance with its own provisions.

The Trust Administration Procedure in California

Every trust has its own unique slate of assets, terms, and conditions. However, while every successor trustee must satisfy different requirements to fulfill their responsibilities, the actual process of trust administration is still subject to certain legal deadlines and procedures. If you are just beginning your tenure as successor trustee, you can typically expect to work through each of the following steps:

1. Obtaining Documents and Filing Paperwork

Successor trustees aren’t legally required to collect all of the deceased person’s paperwork by a certain date, but preparing certain documents at an early stage can help you meet the more formal and deadline-driven requirements of trust administration.

Once practicable, you should locate and retain copies of the following:

• The original trust document
• The deceased person’s death certificate
• The deceased person’s list of trust assets
• The deceased person’s property deeds, including deeds for real property, motor vehicles, and other assets that have been titled to the trust or are intended to be re-titled to the trust

Some of these items, like obtaining the original trust document and listing the trust assets, are integral to fulfilling your duties as successor trustee. Others documents, such as copies of the death certificate, must be presented to banks and other financial institutions to ensure that the decedent’s properties and possessions can be re-titled.

2. Ensuring Adherence to Different Deadlines

If you possess a copy of the deceased person’s will, you must file it with the appropriate probate court within 30 days of the decedent’s death. After a probate case has been opened, you have another 60 days to provide notice of trust administration to the trust’s heirs and beneficiaries.

This initial notice must contain information including:

• The details of the trust
• The names of any heirs and beneficiaries
• Your full name and address

Once heirs receive their notices of administration, they have 120 days to contest the trust’s terms, including your position as successor trustee.

3. Locating and Re-Titling Trust Assets

If you’re lucky, the decedent’s trust has already been funded with all of the assets that the decedent intended it to have within its control. However, few successor trustees are so fortunate. It is very common to find that the deceased person left behind a pour-over will, which directs a variety of different assets be transferred to their trust upon death.

The process of locating and inventorying assets for an estate or a trust can be very challenging. It might necessitate:

• Looking through emails and unopened letters to find evidence of unlisted bank accounts and storage units
• Searching basements, attics, and safe deposit boxes for assets that the decedent may have forgotten about

You might also be responsible for initiating probate, if probate is necessary and you are charged with acting as executor.

4. Managing and Distributing Trust Assets

Successor trustees have what is termed a “fiduciary duty” to not only fulfill the terms of the trust faithfully but to ensure that the trust’s assets are managed responsibly. This duty is legally binding, and it remains in place until the trust expires or the assets have been distributed to their intended recipients.

You may be expected to do the following:

• Manage volatile investments
• Make decisions about a rental property or commercial business
• Appraise, preserve, and protect valuable collections of jewelry or artwork

Since very few people have all of the knowledge needed to manage many different types of estate assets, this step often involves obtaining a California trust administration lawyer’s assistance. 

5. Filing the Trust’s Taxes

Although trusts aren’t subject to all of the same rules as probate, they may still owe a substantial amount of money in taxes. And, if you are the successor trustee, you are required to file taxes on the trust’s behalf. These could include estate taxes, the deceased person’s outstanding income taxes, or the trust’s own income taxes.

How the Law Firm of Kavesh, Minor & Otis, Inc. Could Help Take the Challenge Out of Trust Administration

The Law Firm of Kavesh, Minor & Otis, Inc. has spent a half-century helping families in Torrance, Los Angeles, and Orange Counties protect their legacies. Our experienced team of trust administration attorneys could help you take the challenge out of trust administration by:

• Ensuring that trusts are properly drafted and funded before they take effect or move into administration
• Assessing a trust’s potential tax liabilities, filling out estate tax declarations, and directing payment of its balance
• Managing the trust’s assets safely and recommending top-rated and experienced experts to assist in the management of especially volatile or high-value assets
• Mediating disputes among heirs or defending the trust—and successor trustee—from challenges, including lawsuits
• Distributing trust funds and allocations to beneficiaries in accordance with the terms of the trust and with unwavering commitment to the grantor’s intent