Trust Administration Basics: The Trustee’s Fiduciary Duties and Initial Steps After the Grantor’s Death

After a grantor dies, the successor trustee must review the trust, identify and protect its assets, notify beneficiaries and heirs, maintain records, address debts and taxes, and follow the distribution instructions. These are fiduciary responsibilities, meaning the trustee must act carefully, loyally, and in the beneficiaries’ interests rather than treating trust property as personal property. 

At Davidson Estate Law, we help trustees and families in Oakland and across the Bay Area understand California trust administration. Contact us if you have been named as a successor trustee and need guidance on beginning or completing the process. 

What Changes After the Grantor Dies?

A revocable living trust commonly becomes irrevocable, in whole or in part, when the grantor dies. California statutes frequently use “settlor” for the person who created the trust, although “grantor” is also commonly used. 

If the successor trustee accepts the position, that person receives authority to administer the trust under its terms and California law. The trustee does not personally own the assets or have unrestricted authority to use them. 

The trustee should locate the signed trust, all amendments or restatements, property schedules, and related estate planning documents. These materials determine who may serve, which beneficiaries have interests, and whether the assets should be distributed or continue in trust. 

The Trustee’s Initial Checklist

The trustee’s first practical responsibility is to understand the trust and secure the property under its control. Initial steps commonly include: 

1. Obtaining certified copies of the death certificate 

2. Reviewing the complete trust and all amendments 

3. Confirming the acting trustee’s authority 

4. Identifying beneficiaries and the deceased grantor’s heirs 

5. Creating an inventory of trust assets 

6. Determining how each asset is legally titled 

7. Securing real estate, vehicles, valuables, and important records 

8. Notifying relevant financial institutions 

9. Identifying ongoing expenses, debts, insurance needs, and tax concerns 

10. Beginning a record of all trust income and expenditures 

Not everything associated with the deceased necessarily belongs to the trust. Jointly held property, individually owned assets, retirement accounts, life insurance, and assets with beneficiary designations may pass under different rules. The trustee should verify ownership before acting. 

When Must Beneficiaries and Heirs Be Notified? 

California generally requires statutory notification when a revocable trust becomes irrevocable because of a settlor’s death. The acting trustee ordinarily must serve the notice on each beneficiary of the irrevocable trust or portion and each heir of the deceased settlor. 

The notice generally must be served within 60 days after the event requiring it. Different timing may apply if the trustee’s position is vacant or the trustee later discovers another person entitled to notice. 

The notification must contain specified information about the trust and trustee, explain the recipient’s right to request the trust’s terms, and include the required warning about the deadline for contesting the trust. An informal family announcement does not replace this statutory notice. 

A Trustee’s Core Fiduciary Duties

A California trustee must follow the trust, act in the beneficiaries’ interests, treat beneficiaries impartially, protect trust property, and provide required information and accountings. 

These responsibilities include: 

• Loyalty: The trustee must avoid using trust assets for improper personal benefit or placing personal interests ahead of the beneficiaries. 

• Impartiality: If beneficiaries have different or competing interests, the trustee must consider those interests fairly. 

• Prudent management: Investment and management decisions must comply with applicable prudent-investor requirements and the trust’s provisions. 

• Preservation: The trustee must take reasonable steps to control and protect trust property. 

• Separation of assets: Trust property should remain separate from the trustee’s personal property and be properly identified. 

• Communication and accounting: Beneficiaries may be entitled to information relevant to their interests and formal accountings when required. 

Through our California trust administration services, we help trustees apply these duties to property management, beneficiary requests, professional expenses, investments, and proposed distributions. 

Trustees may retain attorneys, accountants, appraisers, investment professionals, and other advisers when appropriate. Hiring a professional does not eliminate the trustee’s obligation to select and supervise that person prudently. 

Records, Debts, and Taxes Require Careful Attention

Accurate records allow the trustee to explain every receipt, payment, sale, investment, fee, and distribution. A dedicated trust account can help prevent trust funds from being mixed with the trustee’s personal money. 

The trustee may need to evaluate debts, maintain insurance, obtain asset valuations, reserve money for expenses, and address final individual or trust tax returns. The necessary steps depend on the trust, the assets, and whether any property must pass through probate. 

California law may require accountings at least annually, upon termination of the trust, and when the trustee changes, subject to statutory exceptions. A required accounting must contain specific financial and administrative information. 

When Can Trust Assets Be Distributed?

Distribute trust assets only after the trustee understands the instructions and has reasonably addressed outstanding obligations. Distributing everything immediately may create problems if taxes, debts, administration expenses, or property disputes remain unresolved. 

Some trusts direct immediate or outright distributions. Others require assets to remain in continuing trusts for a spouse, child, or another beneficiary. Real estate, business interests, and other noncash property may require valuation, sale, or transfer documents. 

Before completing distributions, the trustee should confirm each beneficiary’s entitlement, preserve appropriate reserves, provide any required accounting, and document each transfer. The appropriate timeline depends on the trust and the complexity of the administration. 

Estate Planning Attorney in Oakland, California

For more than 25 years, our firm has provided legal guidance and compassionate counsel to Bay Area families. We assist with wills, revocable living trusts, trust administration, and probate matters, helping clients plan for loved ones and manage responsibilities after a death. 

Our Bay Area estate planning attorney works with clients in Oakland, Walnut Creek, Berkeley, San Francisco, El Cerrito, Alameda, and communities throughout the Bay Area. Contact us to discuss your trust administration or estate planning needs.