Steps to Administer a Trust if You Are Nominated as a Trustee

Posted by Ian R. Greensides | Sep 05, 2020 | 0 Comments

1.  Take Care of Yourself and Your Family

It is important that you engage in good self-care, you will not be able to handle someone else's affairs well, if you are overwhelmed or not taking care of yourself.  Remember, in an airplane, we are advised to put our own oxygen mask on first before helping others.

2. Roles

Decedent - The person who has died.  

Settlor - The person who created the Trust and moved the assets into the Trust is known as the "Settlor."  If this jargon sounds confusing - remember that the term "settling" financial accounts is often used when referring to bookkeeping or accounting.  There can be two Settlors (spouses for example).

Trustee - A Trustee is someone who holds and/or manages property for someone else who they "trust."  Funds held for someone else are considered to be held in "trust."  The Settlor was most likely also serving as the initial Trustee for the Trust.  After they have passed away, if you are nominated to be the Successor Trustee, and you accept this role (by signing an acknowledgement), then you will become the Trustee.

Beneficiaries - These are people who are named to receive the assets of the Trust after the death of the Settlor.  As a Trustee, you have a duty to manage the assets, for the benefit of the beneficiaries.  Even if you are also a beneficiary, as Trustee, you must treat all beneficiaries equally and fairly and manage the Trust assets for their benefit.

Heirs - These are people who would inherit the assets of the estate, if there was not a Trust or if there are assets that were not part of the Trust's assets.  These can also be people who are named as beneficiaries in the Trust, but heirs at law are not required to be named as beneficiaries.  Heirs are lineal descendants whether related by blood or adoption, and in some circumstances, may include step-family relationships.

3.  Contact an Attorney and a Tax Professional

There are some decisions that must be made within the first few months after a death.  For example, for certain estates, the Internal Revenue Service requires that certain assets be allocated or designated within a few months after death.

In addition, tax returns must be file, or extensions of time must be obtained to file them.  This includes the filing of the personal tax return (1040) for the final year that the Settlor was alive, and the filing of a 706 tax return for the estate.

4.  Lodge the Will with the Court

Even if there is a Trust, there is usually also a Will.  Most people nominate the same person to be Executor that they have nominated to be Successor Trustee.  As Executor, you must make a good faith effort to locate the original Will.  The original Will needs to be filed with the Superior Court's probate Division in the County where the Settlor (Decedent) resided at death.

5.  Notify Beneficiaries and Family Members of the Death of the Settlor and the Terms of the Trust

As Trustee, you must serve formal written notice to beneficiaries and heirs of the terms of the Trust. This is so that the beneficiaries and heirs know what they will or will not receive, and the sending of this notice provides a cut-off time for anyone to contest the terms of the Trust.  

About the Author

Ian R. Greensides

Ian R. Greensides has been admitted to practice law in California since 2004. Ian has actively successfully defended and prosecuted several cases to trial, including several successful appeals.


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