Administering a trust in California is a significant responsibility that requires strict adherence to the California Probate Code. Trustees are legally bound to carry out their duties in a manner that prioritizes the best interests of the beneficiaries and complies with the trust’s terms. At Kushner Legal Corporation, we regularly advise trustee’s on their duties to ensure compliance with both the terms of the trust and the requirements set out in the Probate code.
Here are some of the key steps required for Trustees

1. Accepting the Role of Trustee

Before beginning any administrative duties, a trustee must formally accept the role. This is often done by signing a written acknowledgment of the responsibilities outlined in the trust document. Under California Probate Code §15600, the trustee assumes fiduciary duties upon accepting this role.

2. Reviewing the Trust Document

The trustee must thoroughly review the trust document to understand its terms, including the distribution instructions, trustee powers, and any special conditions. Under Probate Code §16001, the trustee has a duty to administer the trust according to its terms and purposes. The trustee must be sure that they thoroughly understand the instructions left by the grantors.

3. Providing Notice to Beneficiaries

Within 60 days of the trustor’s death, the trustee must notify all trust beneficiaries and heirs of the trustor in writing. This notice, required under Probate Code §16051, must include the trustee’s contact information and inform beneficiaries of their right to request a copy of the trust. Many trustees choose to send a copy of the trust with the initial notice.

4. Identifying and Collecting Trust Assets

The trustee must take control of all trust assets, including real estate, bank accounts, investments, and personal property. This may involve locating and securing deeds, account statements, and other documents to verify ownership. Probate Code §16003 requires the trustee to take reasonable steps to safeguard trust property.

5. Obtaining a Tax Identification Number

Upon the death of the grantor, the trust becomes irrevocable and the trustee must obtain a Taxpayer Identification Number (TIN) from the IRS for tax reporting purposes. This is essential for handling the trust’s income tax filings.

6. Paying Debts and Expenses

The trustee is responsible for paying any outstanding debts and expenses of the trustor, such as medical bills, funeral costs, and taxes. Probate Code §19080 allows trustees to use trust assets to satisfy legitimate claims against the trustor’s estate.

7. Filing Tax Returns

The trustee must ensure that all necessary tax returns are filed, including the trust’s income tax returns and any estate tax returns if applicable. Failure to comply with tax obligations can lead to personal liability for the trustee.

8. Accounting to Beneficiaries

Transparency is a critical aspect of trust administration. Under Probate Code §16052, trustees must provide beneficiaries with regular accountings, which include detailed information about the trust’s assets, liabilities, income, and expenses. Beneficiaries appreciate when a trustee is transparent and expedient in their accounting.

9. Distributing Trust Assets

Once all debts, taxes, and expenses have been paid, the trustee must distribute the remaining trust assets to the beneficiaries as specified in the trust document. Probate Code §16001 emphasizes that this must be done impartially and in accordance with the trust’s terms.

10. Closing the Trust

After all assets have been distributed and administrative tasks are complete, the trustee can formally close the trust. This may involve preparing a final accounting and obtaining written acknowledgments from the beneficiaries.

Conclusion

Trust administration in California requires careful attention to detail and strict compliance with the California Probate Code. At Kushner Legal Corporation, we advise trustees on the importance of following all required steps during trust administration to avoid potential pitfalls and complaints from beneficiaries.
Contact Kushner Legal Corporation to schedule a consultation if you have questions about trust administration.

Here is a link which would be useful:
https://leginfo.legislature.ca.gov/