Being designated as a trustee of a loved one’s trust can be an honor. Knowing that someone trusts someone enough to carry out their final wishes can bring a great sense of pride. With the role comes heavy responsibility which shouldn’t be taken lightly. Depending on the assets and terms of the trust, it can be complex and time consuming. Additionally, it carries fiduciary liability as outlined below. Therefore, a trustee should consider whether it needs legal assistance in performing the role.
Under California law, a trustee has certain fiduciary responsibilities in administering a trust pursuant to California Probate Code §16000 – 16015. Among those duties are the requirements to:
- Administer the trust solely in the interest of the beneficiaries;
- Refrain from self dealing;
- Take control of and preserve trust property;
- Make trust property productive under the circumstances and in furtherance of the trust; and
- Keep trust property separate and ensure it is designated as such pursuant to the terms of the trust.
Considering the forgoing duties, here’s a trustee list to help in getting organized:
- Gather Documents – locate the full trust document and any related documents such as a will. Verify the named successor trustee(s) to succeed the decedent;
- Provide Notice – Identify the beneficiaries of the trust. Notice of trust administration must be provided as required under California Probate Code §16061.7;
- Gather Assets – A trustee must take affirmative steps to identify assets and where necessary ensure that such assets are titled in the name of the trust;
- Liquidate – a trustee may need to sell certain assets such as real estate;
- Pay Debts – as trustee must pay debts of a trust from its assets;
- File taxes – a trustee is responsible for filing of a decedent’s final tax return, probate estate tax, and the trust’s tax return;
- Account – trustees may be required to provide an accounting to beneficiaries. An accounting is a list of the trust’s assets and liabilities;
- Distribute – a trustee must plan and distribute assets to beneficiaries in accordance with the terms of the trust.
The information above does not constitute legal advice but rather has been provided for informational purposes. Professional legal assistance is recommended. Please don’t hesitate to schedule a consultation to learn more about how we can help.