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TRUST ADMINISTRATION
This section is designed to provide general information to the trustee of a trust in effect after the settlor (also known as grantor or trustor) has become incompetent or has died.
Your powers and duties as trustee are spelled out in California Probate Code Section 16000, et. seq. A synopsis of those powers and duties can be found in our form entitled Memorandum Regarding Trustee's Duties to Beneficiaries.
In order to avoid personal liability, it is imperative that you administer the trust in accordance with the laws and in accordance with the terms of the trust. Please check the Glossary for terms that are commonly used. They may have special meanings under the law.
Your powers and duties as trustee are spelled out in California Probate Code Section 16000, et. seq. A synopsis of those powers and duties can be found in our form entitled Memorandum Regarding Trustee's Duties to Beneficiaries.
In order to avoid personal liability, it is imperative that you administer the trust in accordance with the laws and in accordance with the terms of the trust. Please check the Glossary for terms that are commonly used. They may have special meanings under the law.
While the Settlor is Alive
If you are trustee of a trust of which the settlor is alive, you will be responsible for the investment of the trust assets. You will need to keep accurate records of all assets, received and expended, and provide an accounting at least annually. You will also need to oversee the preparation of tax returns annually. You will be entitled to reasonable compensation, which is generally construed to be in a range of 1-2% of the gross trust estate, recalculated annually. In order to justify your fees, you should keep strict account of your time and the activities in which you engage on behalf of the trust. For more information, please access Guidelines for the Individual Trustee of an Irrevocable Trust.
After the Death of the Settlor
Probate Code Section 16061.7 requires that within 60 days of a trust or a portion thereof becoming irrevocable, the trustee must serve a specified notification upon each beneficiary of the trust and heir at law of the decedent. If the trust is a charitable trust, notice must also be served on the Attorney General. A trustee who fails to give this notice may be responsible for damages including attorneys fees and costs. This Notice provides a 120-day period during which the beneficiaries and heirs at law may contest the terms of the trust. It is strongly advised that no distributions be made to any beneficiary(ies) prior to the conclusion of the 120 day period.
At the death of the settlor, the trustee must marshall all the assets, and have the assets valued as of the date of death. The trustee is responsible for making sure all appropriate tax returns are filed and taxes timely paid.
Sometime after the 120 day notice period has expired, the trustee will need to prepare a trust accounting and a proposed distribution of the assets for the beneficiary(ies) and should receive a written Waiver of Further Accounting and Receipt on Distribution, prior to distributing the assets to the beneficiary(ies).
If you are trustee of a trust of which the settlor is alive, you will be responsible for the investment of the trust assets. You will need to keep accurate records of all assets, received and expended, and provide an accounting at least annually. You will also need to oversee the preparation of tax returns annually. You will be entitled to reasonable compensation, which is generally construed to be in a range of 1-2% of the gross trust estate, recalculated annually. In order to justify your fees, you should keep strict account of your time and the activities in which you engage on behalf of the trust. For more information, please access Guidelines for the Individual Trustee of an Irrevocable Trust.
After the Death of the Settlor
Probate Code Section 16061.7 requires that within 60 days of a trust or a portion thereof becoming irrevocable, the trustee must serve a specified notification upon each beneficiary of the trust and heir at law of the decedent. If the trust is a charitable trust, notice must also be served on the Attorney General. A trustee who fails to give this notice may be responsible for damages including attorneys fees and costs. This Notice provides a 120-day period during which the beneficiaries and heirs at law may contest the terms of the trust. It is strongly advised that no distributions be made to any beneficiary(ies) prior to the conclusion of the 120 day period.
At the death of the settlor, the trustee must marshall all the assets, and have the assets valued as of the date of death. The trustee is responsible for making sure all appropriate tax returns are filed and taxes timely paid.
Sometime after the 120 day notice period has expired, the trustee will need to prepare a trust accounting and a proposed distribution of the assets for the beneficiary(ies) and should receive a written Waiver of Further Accounting and Receipt on Distribution, prior to distributing the assets to the beneficiary(ies).
If you would like our help in the administration of a trust of which you are the trustee, please complete the Trust Administration Worksheet and then call our office for an appointment for a complimentary consultation.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
Copyright 2023 © by Jacqueline M. Skay. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement.
Copyright 2023 © by Jacqueline M. Skay. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement.