When a loved one passes away, becoming responsible for their trust can feel overwhelming. Most successor trustees in California have never handled a trust administration before. As a result, many trustees feel unsure about what steps they should take next.
In many situations, the trustee is also grieving the loss of a parent, spouse, sibling, or close family member. At the same time, the trustee may suddenly need to manage bank accounts, real estate, personal property, beneficiaries, and financial institutions.
Questions often arise immediately after death. For example:
- What is the trustee legally required to do?
- How quickly does the trust administration process need to move forward?
- Can the estate avoid probate?
- Can the trustee become personally liable for mistakes?
In San Diego trust administrations, these issues can become even more significant. Many trusts involve valuable California real estate, complicated property tax issues, and multiple beneficiaries.
This article explains the basic responsibilities of a California trustee after death. In addition, it discusses common mistakes trustees should avoid and practical issues that frequently arise during the trust administration process.
Short Answer
- A trustee is responsible for managing and distributing trust assets after death.
- Trustees must notify beneficiaries and often obtain a new EIN number for the trust.
- Trustees may need to gather assets, open trust accounts, and coordinate distributions.
- California trustees owe fiduciary duties to the beneficiaries.
- Trustees can become personally liable for mistakes during the administration process.
- Many trustees work with a California trust administration attorney for guidance.
Speak directly with an attorney - no pressure, no obligation.
What Is a Trustee?
A trustee is the person or institution responsible for managing and administering a trust.
In most California Revocable Living Trusts, the person who creates the trust initially serves as trustee during their lifetime. That person is usually called the settlor or trust creator.
However, after the trust creator passes away or becomes incapacitated, the individuals or institution named to take over management of the trust becomes the successor trustee.
The successor trustee has a legal duty to manage the trust assets according to:
- the terms of the trust, and
- California law.
In many situations, the trustee must:
- gather trust assets,
- notify beneficiaries and heirs,
- pay debts and taxes,
- coordinate asset transfers,
- and eventually distribute assets to beneficiaries.
Many people believe that serving as trustee simply means giving assets to family members. In reality, trust administration often involves significant legal and financial responsibilities.
Under California law, trustees are fiduciaries. Therefore, trustees must act in the best interests of the beneficiaries and manage trust property carefully.
Depending on the complexity of the trust estate, the trustee may need to work with:
- attorneys,
- accountants,
- financial institutions,
- appraisers,
- and real estate professionals.
In many California trusts, the successor trustee is:
- a spouse,
- an adult child,
- a trusted friend,
- or another family member.
However, some individuals choose a professional fiduciary or corporate trustee instead.
Want to learn more about California Revocable Living Trusts? Read our guide explaining how Revocable Living Trusts work in California.
What Happens Immediately After the Death of the Trust Creator?
Locate Estate Planning Documents
First, the successor trustee should gather and review all estate planning documents belonging to the deceased.
These documents may include:
- the trust,
- trust amendments,
- the will,
- certifications of trust,
- deeds,
- insurance policies,
- and financial statements.
Confirm the Identity of the Successor Trustee
The trustee should confirm that they are actually the acting successor trustee.
Sometimes, the trust creator signed later amendments that changed the trustee designation. Therefore, the trustee should carefully review the most recent trust documents.
Review the Will
The trustee should also review the deceased’s will.
In many estate plans, the will names the trust as the beneficiary of the probate estate. This type of will is commonly known as a pour-over will.
Additionally, the trustee should determine whether they are also named as executor of the will.
If another individual is serving as executor, the trustee may need to work with that person to transfer probate assets into the trust.
Under California law, the original will generally must also be filed with the appropriate California court.
Funeral Expenses
In some situations, the trust may be responsible for funeral expenses.
Therefore, the trustee should review the trust terms carefully. In addition, the trustee should maintain detailed records of all funeral-related expenses and payments.
Order Death Certificates
A trustee should order multiple certified copies of the death certificate.
Financial institutions and government agencies frequently require certified death certificates before releasing information or transferring assets.
For example, death certificates are often required for:
- banks,
- insurance companies,
- investment companies,
- and real estate transfers.
In San Diego County, death certificates can generally be ordered in person, online, or by mail.
Secure Property and Assets
One of the trustee’s most important early responsibilities is securing trust property and protecting assets.
Under California law, trustees have a fiduciary duty to preserve trust property and prevent unnecessary loss or damage.
First, the trustee should secure the deceased’s home and any other real property.
This may include:
- collecting keys,
- reviewing alarm systems,
- checking who has access to the property,
- and changing locks if necessary.
If the property is rented, the trustee should contact tenants and review any lease agreements. Additionally, the trustee should make sure that rent payments continue to be properly collected.
The trustee should also protect valuables and personal property located inside the home. Family members sometimes remove sentimental items shortly after death. However, this can later create disputes between beneficiaries.
In addition, the trustee should forward the deceased’s mail to an address that the trustee can monitor.
Reviewing the mail may help identify:
- unknown assets,
- recurring bills,
- debts,
- insurance policies,
- and investment accounts.
The trustee should also locate and secure all vehicles belonging to the deceased.
Furthermore, the trustee should review all insurance policies to confirm that coverage remains active and appropriate after death.
In some situations, financial institutions or insurance companies may also need to be notified that the successor trustee is now acting on behalf of the trust.
List of Assets
The trustee should create a list of all trust assets.
One of the best ways to begin is by reviewing:
- the trust distribution sections, and
- the Schedule of Assets attached to the trust.
List of Liabilities
The trustee should also identify known or suspected debts.
For example, the trustee may discover liabilities by reviewing:
- mail,
- account statements,
- loan documents,
- and credit card bills.
Additionally, family members may provide useful information regarding outstanding debts or obligations.
Does the Trustee Have to Notify Beneficiaries?
Yes. The California Probate Code imposes specific notice requirements on trustees after a revocable trust becomes irrevocable.
Who Is Entitled to Notice?
In many situations, both beneficiaries and heirs of the deceased may be entitled to notice.
Therefore, trustees should carefully review California Probate Code requirements before sending notices.
How Quickly Must Notice Be Given?
Under California law, trustees generally must provide notice within 60 days after the trust becomes irrevocable.
Trustees have a strong interest in serving proper notice because beneficiaries typically have a limited time to contest the trust after receiving notice.
What Happens If the Trustee Fails to Give Notice?
Failure to properly notify beneficiaries may create significant problems.
For example, improper notice may:
- delay the administration,
- extend the trust contest period,
- increase the risk of litigation,
- and potentially expose the trustee to liability.
Fortunately, many notice-related problems can be avoided with early legal guidance.
Does the Trustee Need a New EIN Number?
Yes. During the lifetime of the trust creator, a revocable living trust usually uses the settlor’s Social Security number for tax purposes.
However, after death, the trust generally becomes irrevocable. As a result, the trustee will usually need to obtain a new EIN number for the trust.
The trustee may need the EIN to:
- open a trust administration bank account,
- manage trust assets,
- and administer the trust properly.
Importantly, trustees should never mix trust assets with personal assets.
Using a personal account for trust funds may constitute a breach of fiduciary duty.
Should the Trustee Open a Separate Trust Bank Account?
Yes. In most California trust administrations, the trustee should open a separate trust administration account.
Typically, the trustee will open this account using the trust’s new EIN number.
The trust administration account is often used for:
- collecting trust funds,
- depositing rental income,
- paying trust expenses,
- and making beneficiary distributions.
Maintaining a separate account helps:
- preserve accurate records,
- avoid commingling,
- and simplify trust accountings.
What Assets Does the Trustee Need to Collect?
Bank Accounts and Investment Accounts
The trustee should identify all bank accounts and investment accounts connected to the deceased.
Next, the trustee should determine:
- whether the accounts were titled in the name of the trust,
- whether the trust was named as beneficiary,
- and whether the assets were intended to be part of the trust estate.
Sometimes, assets are unintentionally left outside the trust. In those situations, additional legal procedures may be required.
The trustee should also review whether any accounts had joint owners. Jointly owned accounts often pass automatically to the surviving owner.
Retirement Accounts and Life Insurance
Retirement accounts and life insurance policies usually contain beneficiary designations.
If individuals are named as beneficiaries, those assets generally pass directly to those individuals.
However, if the trust is named as beneficiary, the assets may become part of the trust administration.
Importantly, retirement accounts can involve complicated tax rules and strict deadlines. Therefore, trustees should proceed carefully.
Real Estate
The trustee should gather information regarding all real estate owned by the deceased.
If the deceased owned property in multiple states, the trustee may need to work with attorneys in those states.
In California, trustees may need to prepare and record documents such as:
- affidavits of death of trustee,
- affidavits of death of joint tenant,
- and other county-specific forms.
Additionally, the trustee should review:
- title ownership,
- homeowner’s insurance,
- mortgage obligations,
- and property tax reassessment issues.
One factor that makes San Diego trust administrations unique is the dramatic increase in local real estate values over the past several decades.
Many San Diego families purchased homes in the 1970s, 1980s, or 1990s for prices that are only a fraction of current values. Today, many of those homes are worth more than one million dollars.
This issue becomes especially important during trust administration because of California property tax reassessment rules.
Many elderly homeowners in San Diego currently pay relatively low property taxes because their assessed values were established decades ago under Proposition 13.
However, after death, property taxes may increase substantially if the proper parent-child exclusions or reassessment protections are not claimed.
Therefore, trustees should carefully evaluate whether any California property tax exclusions may apply to inherited real estate.
Personal Property
The trustee should create an inventory of the deceased’s personal property.
This helps ensure that assets are properly accounted for and distributed fairly.
Personal Property Memorandum
The trustee should determine whether the deceased completed a Personal Property Memorandum.
A valid Personal Property Memorandum may direct how specific personal items should be distributed.
Want to learn more about Personal Property Memorandums? Read our article explaining California Personal Property Memorandums.
Distribution of Personal Property
Many trust disputes arise from personal property issues.
Therefore, trustees should carefully review the trust instructions regarding household contents and sentimental items.
Additionally, trustees should avoid allowing beneficiaries to remove property from the home too early.
Otherwise, disputes regarding fairness and equal distributions may arise later.
Vehicles
The trustee should identify and secure all vehicles belonging to the deceased.
The trustee should also determine:
- whether the vehicle had a transfer-on-death beneficiary,
- whether the vehicle was jointly owned,
- and whether the vehicle was intended to be part of the trust estate.
In some situations, California DMV procedures such as a REG 5 affidavit may be available.
Can a Trustee Be Personally Liable?
Yes. Under California law, trustees can become personally liable in certain situations.
Because trustees owe fiduciary duties to the beneficiaries, trustees must act carefully, prudently, and in good faith.
Breach of Fiduciary Duty
A trustee owes a duty of loyalty to the beneficiaries.
Therefore, trustees should avoid:
- self-dealing,
- using trust property for personal benefit,
- and commingling trust assets with personal assets.
Failure to Exercise Reasonable Care and Prudence
Trustees must administer trust assets with reasonable care and diligence.
For example, trustees may face liability for:
- poor financial management,
- improper investments,
- or failure to preserve trust property.
Failure to Provide Notice and Information
Trustees generally have duties to provide notices and information to beneficiaries.
Additionally, some trusts require formal accountings.
Failure to comply with these obligations may increase the risk of disputes and litigation.
Improper Delegation or Failure to Supervise Agents
Trustees often hire:
- attorneys,
- accountants,
- real estate agents,
- and financial professionals.
However, trustees still have a duty to reasonably supervise those individuals.
Intentional Misconduct or Negligence
Trustees may also become personally liable for negligent or intentional conduct that harms trust property or beneficiaries.
Failure to Act in Good Faith
California law generally does not protect trustees who act:
- in bad faith,
- with gross negligence,
- or with reckless indifference.
Failure to Address Beneficiary Objections
Ignoring beneficiary concerns may increase the likelihood of litigation.
Therefore, trustees should address disputes carefully and promptly.
Profiting From a Breach of Trust
A trustee may also be liable for any profit obtained through a breach of trust.
Fortunately, many trustee mistakes can be avoided with proper legal guidance.
Should a Trustee Hire a Trust Administration Attorney?
One of the most common questions successor trustees ask is whether they should hire a trust administration attorney.
In limited situations, a trustee may be able to administer the trust without legal assistance.
For example, this may occur when:
- the trustee is also the sole beneficiary,
- there are no disputes,
- there are no complicated tax issues,
- and no major legal filings are required.
However, most California trust administrations benefit significantly from legal guidance.
Trust Administration Can Be Complex
Even modest trust estates may involve complicated legal and practical issues.
For example, trustees may need help with:
- real estate transfers,
- tax filings,
- beneficiary notices,
- trust accountings,
- Heggstad petitions,
- and property tax reassessment issues.
Attorneys Can Help Reduce Trustee Liability
Working with a trust administration attorney may help reduce the risk of mistakes.
For example, attorneys often assist trustees with:
- notices,
- deadlines,
- distributions,
- accountings,
- and asset transfers.
Family Conflict and Beneficiary Disputes
Trust administration often creates emotional tension within families.
Even honest trustees may face accusations of:
- favoritism,
- delay,
- or unfair treatment.
However, working with an attorney may help reduce tension because beneficiaries understand that the trustee is relying on professional guidance.
Many Trustees Have Never Administered a Trust Before
Most individuals named as successor trustees have never administered a trust before.
As a result, many trustees feel overwhelmed by the legal duties and potential liability involved.
Fortunately, experienced legal guidance often provides trustees with peace of mind during a difficult and emotional time.
Frequently Asked Questions
Yes. Under California law, trustees are generally entitled to reasonable compensation unless the trust states otherwise.
Reasonable compensation often depends on:
the size of the trust,
the complexity of the administration,
the amount of work involved,
and the skill required.
In many California trust administrations, trustee compensation for a nonprofessional trustee may range from 0.5% to 1% of the trust assets. Professional fiduciaries often charge between 1% and 1.5%, while corporate trustees, such as banks, may charge between 1% and 2.5%.
Additionally, trustees are usually entitled to reimbursement for reasonable expenses incurred during the administration process.
However, trustees should carefully review the trust language because the trust document itself often controls compensation issues.
The length of a California trust administration depends heavily on the complexity of the assets and the cooperation of the beneficiaries.
For example, a simple trust administration involving a single bank account and cooperative beneficiaries may sometimes be completed within a few weeks.
However, administrations involving:
real estate,
multiple beneficiaries,
retirement accounts,
tax issues,
or beneficiary disputes
may take substantially longer.
Additionally, financial institutions and title companies sometimes cause delays.
In many situations, yes.
Whether the trustee may sell real estate depends primarily on the language of the trust and the powers granted to the trustee.
If the trust authorizes the trustee to sell property, the trustee will usually have authority to sell the home.
However, the trustee may still need to:
satisfy debts,
resolve beneficiary issues,
complete tax matters,
and finalize the administration
before distributing sale proceeds.
Additionally, trustees should carefully document the sale process to avoid later disputes.
Yes. Assets properly titled in the name of a California Revocable Living Trust generally avoid probate.
This is one of the primary reasons many individuals create revocable living trusts.
However, only assets actually transferred into the trust will avoid probate.
The proper solution depends on:
the type of asset,
the value of the asset,
whether the asset was referenced in the trust,
and whether a valid pour-over will exists.
For example, California real estate unintentionally left outside the trust may sometimes be transferred into the trust through a California Heggstad Petition.
In other situations, assets below California’s probate threshold may potentially be transferred using a Small Estate Affidavit.
Because these situations can become complicated, trustees should seek legal guidance early.
Final Thoughts
Trust administration can feel overwhelming for many successor trustees.
In many situations, the trustee is also grieving the loss of a loved one while simultaneously trying to manage significant legal and financial responsibilities.
Additionally, tension may arise between siblings, beneficiaries, or other family members during the administration process.
However, with proper guidance, trust administration often becomes much more manageable.
Importantly, trust administration is not only about preparing legal documents.
In many cases, the real challenges involve:
- assets left outside the trust,
- disagreements between beneficiaries,
- personal property disputes,
- problems involving financial institutions,
- or heirs removing property from the home without permission.
Fortunately, experienced legal guidance can help trustees navigate these issues and move the administration process forward more smoothly.
Want to learn more about California trust administration? Visit our San Diego Trust Administration page for additional information.
Why Work With Amichai Law for Trust Administration?
At Amichai Law, we understand that trust administration is often a stressful and emotional process for families. Our office helps California trustees navigate the trust administration process with clear communication, practical guidance, and steady support.
We assist trustees with:
- beneficiary notices,
- trust asset transfers,
- real estate issues,
- and assets unintentionally left outside the trust.
Most importantly, we aim to help trustees avoid unnecessary mistakes and move the administration process forward as smoothly as possible.
Speak directly with an attorney - no pressure, no obligation.