Trust administration and trust disputes
A living trust is meant to avoid probate, but it does not run itself. When the person who created the trust dies, the successor trustee takes on legal duties to the beneficiaries. Most trustees are family members doing this for the first time. The office advises trustees so the trust is handled correctly, and represents beneficiaries when a trustee is not doing the job.
What a successor trustee must do
- Take control and secure assets. Locate the trust document and any amendments, secure the house and accounts, and obtain death certificates.
- Send the required notice. Under Probate Code section 16061.7, the trustee must serve a notice on beneficiaries and heirs within 60 days after the trust becomes irrevocable. That notice starts a 120 day period for anyone who wants to contest the trust.
- Get a tax identification number for the now irrevocable trust and open a trust account.
- Value the assets as of the date of death, which matters for property tax reassessment and the stepped up income tax basis.
- Pay valid debts, final income taxes and expenses.
- Account to beneficiaries and keep them reasonably informed.
- Distribute according to the trust, with receipts and releases.
When there is a dispute
Beneficiaries have the right to information and to an accounting. If a trustee refuses to communicate, mixes trust money with their own, or favors one beneficiary, the probate court can order an accounting, surcharge the trustee, or remove them. The office handles petitions for accountings, instructions, and trustee removal, and defends trustees who are doing their job correctly.
Common questions
How long does trust administration take?
A simple trust can often be wrapped up in six months to a year. The 120 day contest window, selling a house, and tax filings are the usual timing factors.
Can the trustee be paid?
Yes. A trustee is entitled to reasonable compensation unless the trust says otherwise, and many family trustees choose to waive it.
I am a beneficiary and the trustee will not tell me anything. What can I do?
Start with a written request for information and an accounting. If that is ignored, the court can order the trustee to account and can remove a trustee who breaches their duties.