Content courtesy of Hatley Law Group APC. Author is Rod Hatley. The post can be seen on Hatley Law Group APC website here.
Being named as a successor trustee carries serious responsibilities under California law. If you find yourself in this role, here’s a roadmap through your first 90 days, with key steps and pitfalls to avoid.
When a settlor passes in California, a revocable trust typically becomes irrevocable and your successor trustee duties CA begin immediately. One of your first obligations is to send notifications to beneficiaries and heirs under (Probate Code) PrC § 16061.7 — often called the “120-Day Letter.”
This notice must go out no more than 60 days after you become aware of the death (or of a beneficiary you did not previously know). The notice informs parties about the trust, identifies the trustee and provides the right to request a copy of the trust, and triggers the statutory deadlines for contesting the trust (“You may not bring an action … more than 120 days … or 60 days from delivery …” language).
Next, what you must do is known as marshalling assets — that is to say, find and take control of all property subject to the trust. This includes real estate, bank accounts, securities, personal property, business interests, and the assets that may be subject to a POUR-OVER will (i.e., assets that were intended to “pour into” the trust via the decedent’s will).
As you gather assets, prepare to re-title trust assets into the trust’s name (retitling) and segregate them from any personal holdings so you avoid commingling funds.
You will also need to request a new EIN for trust, so the trust can file its own tax returns and be properly identified by financial institutions. In parallel, you must review creditor claims: issue creditor notices, pay valid debts from trust assets, and assess whether any unpaid taxes or liabilities remain.
Finally, keep careful records and prepare a trust accounting, summarizing receipts, disbursements, and distributions as required under accounting basics (Probate Code §§ 16062-16064).
Week-by-week milestones
Here’s a helpful breakdown of milestones in your first 12 weeks:
Weeks 1–2
Obtain multiple death certificates (order 5–10) for banks, title companies, etc.
Secure the original trust documents, will, and related estate documents.
Under § 16061.7, issue notice to beneficiaries and heirs.
Weeks 3–6
Prepare a comprehensive inventory of all trust and potentially probate assets not yet in trust.
Obtain appraisals for real property, business interests, or assets needing valuation.
Begin paying urgent bills from trust funds (mortgages, utilities, taxes, insurance).
Securing real estate: change locks, check to make sure insurance is in place, handle needed maintenance.
Weeks 7–12
Establish trust bank accounts, transfer assets, and start banking operations under the trust’s EIN.
Continue addressing creditor claims, tax obligations, and necessary filings.
Monitor cash flow, reconcile accounts, and work toward distributions according to the trust.
Start preparing your accounting to provide beneficiaries with a transparent record of financial activities.
This timeline is illustrative; the trust’s terms or asset complexity may require adjustments.
Avoiding common mistakes
Even careful trustees sometimes misstep. Here are key pitfalls and how Attorney Rodney Hatley can assist:
Commingling funds: Never mix trust assets with your personal accounts. That abuse is a breach of fiduciary duty.
Early distributions: Avoid distributing principal prematurely before debts, taxes, and claims are settled, unless the trust explicitly authorizes it.
Missed tax filings: Late or incorrect trust, estate, or income tax filings can trigger penalties and liability.
Failing to fund subtrusts (A/B): If the trust is a marital or community property trust with A/B subtrusts, you must correctly allocate and fund those subtrusts to preserve tax benefits.
Neglecting notice deadlines under PrC § 16061.7: Missing the 60-day deadline for trustee notice can jeopardize the entire administration.
Underestimating complexity: Trusts with real estate, business interests, or complex distribution provisions often require accounting, tax, or legal expertise.
When in doubt, leaning into professional help options is wise. Attorney Rodney Hatley and the team at Hatley Law Group can guide you through compliance, tax planning, dispute avoidance, and proper trust administration tailored to California law.
If you’ve been appointed a successor trustee, following a structured plan while avoiding common mistakes — and seeking qualified assistance — your estate planning legal team will help you fulfill your role efficiently and responsibly. You should also engage your financial planner, and your estate attorney will likely request that.