When an individual or couple creates a revocable living trust, they typically name themselves as the initial trustee. When they become incapacitated, die, or simply become tired with the role as trustee, a successor trustee is named. This successor usually comes in the form of a corporate trustee, professional fiduciary, or family member. The majority of trusts that I have come across opt for the third choice, which can create a huge burden for the family member thrust into this fiduciary role. For many being placed in this position is overwhelming, but the fact remains that there are certain tasks that need to be completed immediately. This post will outline what a newly appointed successor trustee (due to the death of all trustors) should take care of in the first few months in the role.
STEP 1: Collect the trust, other estate planning documents, and all relevant information, then summarize
The trust and going to guide the trustee so think of it as a roadmap to the administration of the trust. The trustee should collect all information concerning the trust and the deceased’s estate and read through the documents to understand his or her powers and how the administration is supposed to take place. Make sure not to forget any trust amendments or restatements, as those may completely change the terms of the original trust. After reviewing all the documents and determining all the assets and liabilities, make sure to summarize the findings.
STEP 2: Get death certificates and lodge will
Trustees will find that they are not able to do many tasks without a certified copy of the death certificate, so getting these copies is imperative to the trust administration. My suggestion is to get at least half a dozen more copies than you will think you will need. As for the will, the executor is supposed to lodge it with the county clerk within 30 days from the date of death. Oftentimes the successor trustee will be the executor.
STEP 3: Notify the beneficiaries, governmental agencies, and other relevant parties
Many trustees are not aware of the statutory requirement to notify the beneficiaries (and certain heirs) concerning the death of the trustor. This is an important step, as it will start the clock with how long a beneficiary has to contest an issue with the trust. The notification is statutory, so the substance and structure must abide by what is provided in the California Probate Code. Other notifications of the trustor’s death should be given to governmental agencies and other relevant parties.
STEP 4: Get Tax ID
The IRS has a pretty simplified system in place to obtain a tax ID online, but there is still a decent amount of information that needs to be inputed. The information required will vary depending on the specifics of the trust administration.
The steps listed above are meant to be a starting point for a successor trustee of a trust administration after the death of the last truster. In no way is this an exhaustive list, as there are many important tasks that will need to be completed after these steps, such as paying creditors, trust accountings, tax returns, and distributions to name a few. A key thing to remember is the successor trustee owes a fiduciary duty to the beneficiaries, so if he or she feels overwhelmed by this process, the best advice is to get a professional to help guide them through this process.
This post is provided for informational purposes only and does not constitute legal advice. It is intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. It is not intended to create an attorney-client relationship and is offered only for general informational and educational purposes. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.