When someone dies, they may leave behind a trust. A trust is a legal document that says who will get their property after they die. The person who makes the trust is called the trustor. The person who is in charge of carrying out the trust is called the trustee.
If the trustor dies, the successor trustee takes over. The successor trustee has a number of important jobs to do.
1. Find the Trust Document
The first thing the successor trustee needs to do is find the trust document. This document will tell the successor trustee what to do with the trustor's property.
The trust document may be in a safe deposit box, a lawyer's office, or the trustor's home. If the successor trustee can't find the trust document, they should ask the trustor's family or friends for help.
2. Tell the Beneficiaries
Once the successor trustee has found the trust document, they need to tell the beneficiaries about it. The beneficiaries are the people who will get the trustor's property.
The successor trustee can tell the beneficiaries by mail, email, or phone. They should also give the beneficiaries a copy of the trust document.
3. Make a List of the Trust Property
The successor trustee needs to make a list of all of the property that the trust owns. This includes things like houses, cars, and money.
The successor trustee should keep this list in a safe place. They should also update it regularly as the trust's property changes.
4. Protect the Trust Property
The successor trustee needs to protect the trust's property from being lost or damaged. They can do this by:
- Keeping the property in a safe place
- Getting insurance for the property
- Hiring someone to take care of the property
5. Manage the Trust Property
The successor trustee needs to manage the trust's property so that it grows and benefits the beneficiaries. They can do this by:
- Investing the money
- Collecting rent from tenants
- Selling property that is no longer needed.
6. How a Trustee's Fee is Determined
A trustee's fee is typically determined by the following factors:
- The size of the trust estate
- The complexity of the trust
- The time and effort required to administer the trust
- The trustee's experience and expertise
- The prevailing market rates for trustee fees
In California, trustee fees are governed by the California Probate Code Section 15680. The Probate Code sets forth a number of factors that the court may consider when determining the reasonableness of a trustee's fee, including:
- The gross value of the trust assets
- The nature and extent of the trustee's services
- The skill, experience, and expertise of the trustee
- The time and effort required to perform the trustee's duties
- The success of the trustee in carrying out the purposes of the trust
What Trustees Can Do to Avoid Liabilities and Breaches of Fiduciary Duty
Trustees can avoid liabilities and breaches of fiduciary duty by taking the following steps:
- Familiarize themselves with the trust document and the California Probate Code. Trustees should have a thorough understanding of the terms of the trust and their duties and responsibilities as trustee.
- Act in the best interests of the beneficiaries. Trustees must always act in the best interests of the beneficiaries of the trust. This means making decisions that are in the best financial and emotional interests of the beneficiaries.
- Avoid conflicts of interest. Trustees must avoid any conflicts of interest that could impair their ability to act in the best interests of the beneficiaries. For example, a trustee should not invest trust assets in a company that they own or have a financial interest in.
- Keep accurate records. Trustees should keep accurate records of all trust transactions. This includes records of all income and expenses, as well as all investment transactions.
- Obtain professional advice when necessary. Trustees should not hesitate to obtain professional advice from attorneys, accountants, and other experts when necessary.
By following these steps, trustees can avoid liabilities and breaches of fiduciary duty and ensure that they are fulfilling their duties in a responsible and ethical manner.
California Probate Code References
- Duty to Locate Trust Document: California Probate Code Section 16400
- Duty to Notify Beneficiaries: California Probate Code Section 16061.7
- Duty to Inventory Trust Assets: California Probate Code Section 16050
- Duty to Secure Trust Assets: California Probate Code Section 16401
- Duty to Manage Trust Assets: California Probate Code Section 16040
- Trustee Fees: California Probate Code Section 15680
- Example 1: A trustor dies and leaves a house to their children. The successor trustee must find the trust document, tell the children about the trust, and make a list of the trust property. The successor trustee must also protect the house from being lost or damaged, and they must manage the house so that it grows in value.
- Example 2: A trustor dies and leaves a business to their employees. The successor trustee must find the trust document, tell the employees about the trust, and make a list of the trust property. The successor trustee must also protect the business from being lost or damaged, and they must manage the business so that it continues to be successful.
Call to Action
If you are a successor trustee, it is important to understand your duties and to fulfill them diligently. If you have any questions about your duties as a successor trustee, you should consult with an experienced attorney.
The Law Office of James Burns can help you to fulfill your duties as a successor trustee. We have the experience and expertise to help you navigate the complex legal and financial issues involved in trust administration.
To learn more about our services, please call us today at (949) 305-8642.
The first duties of a successor trustee are to find the trust document, tell the beneficiaries about the trust, make a list of the trust property, protect the trust property, and manage the trust property. These duties are essential to the proper administration of a trust.