Trust Administration Attorneys
When a loved one passes away, the successor trustee is responsible for settling the trust according to its terms. This process involves legal notices, asset inventories, tax filings, creditor management, and distributions to beneficiaries. Our attorneys guide trustees through every step, helping them fulfill their fiduciary duties correctly, efficiently, and without costly mistakes.
After our daughter was born in 1985, we modified our wills to list appropriate guardians for her and updated our trust. Again, Larry made this process easy to accomplish He made sure that should anything happen to us, our daughter and her guardians would have access to her inheritance when she needed it which gave us peace of mind.
In 1999, the Wife’s mother went into hospice without a will or trust. Larry was able to meet with her mom and make sure power of attorney and medical power of attorney was properly established. His kindness during this difficult time meant a lot to our family.
In 2005 with our daughter turning 21, we three met with Larry in his office to go over the wills and trust with her, so she would understand that everything was taken care of and that she had nothing to worry about. Again, this brought us all great peace of mind. Larry reminds us on a regular basis to review and update our wills and trust as needed.
In 2012, as we were thinking about retiring, Larry was able to make a terrific suggestion for a financial advisor who would help us set up our retirement program. Since this was something neither of us had any skill with, his recommendation, knowing our situation, was perfect.
In 2024, when a friend of ours was hospitalized, her daughter needed to be named as power of attorney and medical power of attorney, so we suggested Larry, who visited once she was discharged and was able to establish the appropriate documentation. This brought great peace of mind to our friend and her daughter.
Now, Davis & Davis LLP has been established with Larry’s son, Eric. Our daughter is looking forward to meeting with them so she may create her own will and trust. We know that Eric is going to be as thorough and caring as his father. After 40+ years with this law firm, we cannot be more delighted with their experience and care for their clients.
If you’re looking for reliable guidance on estate planning, asset protection, or preparing important legal documents, I highly recommend them. They truly care about their clients and take the time to explain your options so you feel confident about your decisions.
Highly recommend for anyone needing help with wills, trusts, powers of attorney, or comprehensive estate planning services.
WHY IT MATTERS
What Can Go Wrong Without Proper Trust Administration?
Being named as a trustee is a significant legal responsibility. California law imposes strict duties on trustees, and the consequences of mishandling the process can be serious. Even well-intentioned trustees can make mistakes that expose them to personal liability or result in disputes with beneficiaries.
Personal Liability for the Trustee
A trustee who fails to follow the terms of the trust, mismanages assets, or does not meet legal deadlines can be held personally liable for losses suffered by the beneficiaries. This means your own assets could be at risk if the administration is not handled correctly.
Beneficiary Disputes and Litigation
When beneficiaries feel they are not being kept informed, do not understand the timeline, or believe the trustee is not acting fairly, disputes can escalate into formal legal challenges. Proper administration with transparent communication prevents most conflicts before they begin.
Tax Penalties and Missed Deadlines
Trust administration involves filing the decedent's final income tax return, obtaining a tax identification number for the trust, and filing trust income tax returns. Missing these deadlines or filing incorrectly can result in penalties from the IRS and the California Franchise Tax Board that reduce the value of the estate.
YOU DO NOT HAVE TO DO THIS ALONE
Get the Legal Guidance Every Trustee Needs
Administering a trust after someone passes away is one of the most complex responsibilities you may face. Our estate planning attorneys will walk you through the process, help you understand your obligations, and ensure you are protected every step of the way.
THE ADMINISTRATION PROCESS
What Trust Administration Involves
Trust administration is a multi-step legal process that begins after the trust creator (the settlor) passes away. Each step has specific legal requirements under California law. Here is what the process typically includes.
Notification of Beneficiaries and Heirs
California law requires the trustee to notify all beneficiaries and legal heirs within 60 days of the settlor's death. This notification must include specific information about the trust, the trustee, and the beneficiaries' rights. Failing to provide proper notice can delay the entire process and expose the trustee to liability.
Asset Inventory and Valuation
The trustee must identify, locate, and secure all assets held in the trust. This includes real property, bank accounts, investment accounts, retirement accounts, life insurance proceeds, personal property, and business interests. Each asset must be properly valued as of the date of death.
Creditor Claims and Debt Settlement
The trustee is responsible for identifying and paying the decedent's outstanding debts, including medical bills, credit card balances, and any other legitimate obligations. Proper handling of creditor claims protects both the trustee and the beneficiaries from future liability.
Tax Filings and Compliance
Trust administration requires the filing of the decedent's final personal income tax return, the application for a new tax identification number (EIN) for the trust, and the filing of fiduciary income tax returns for the trust itself. Estate tax returns may also be required depending on the value of the estate.
Trust Accounting
The trustee has a duty to keep accurate records of all trust transactions, including income received, expenses paid, and distributions made. Beneficiaries have the right to request a formal accounting, and the trustee must be prepared to provide one that is complete, accurate, and transparent.
Distribution to Beneficiaries
Once debts are settled, taxes are filed, and any required waiting periods have passed, the trustee distributes the remaining trust assets to the beneficiaries according to the terms of the trust. This may involve transferring real property, liquidating accounts, or establishing ongoing sub-trusts for minor beneficiaries.
COMMON QUESTIONS
Trust Administration FAQs
What is trust administration?
Trust administration is the legal process of settling a trust after the person who created it (the settlor or grantor) passes away. It involves notifying beneficiaries, inventorying assets, paying debts and taxes, accounting for all transactions, and distributing the remaining assets to beneficiaries according to the terms of the trust.
How is trust administration different from probate?
Trust administration is handled privately, without court supervision, and is generally faster and less expensive than probate. Probate is a court-supervised process required when assets are held in the decedent’s name alone (not in a trust). If the decedent had a properly funded trust, most or all of their assets can be administered outside of probate.
What are my responsibilities as a trustee?
As a trustee, you have a fiduciary duty to act in the best interests of the beneficiaries. This includes managing trust assets prudently, keeping accurate records, communicating with beneficiaries, filing required tax returns, paying legitimate debts, and distributing assets according to the trust terms. You must avoid self-dealing and conflicts of interest.
Can I be held personally liable as a trustee?
Yes. If you breach your fiduciary duties, such as by mismanaging assets, failing to provide required notices, making improper distributions, or not filing tax returns, beneficiaries can petition the court to hold you personally responsible for any resulting losses. Working with an experienced attorney significantly reduces this risk.
How long does trust administration take?
The timeline varies depending on the complexity of the estate. A straightforward trust administration with liquid assets and cooperative beneficiaries may be completed in six to twelve months. More complex situations involving real property, business interests, tax issues, or beneficiary disputes can take considerably longer.
Is the trustee entitled to compensation?
Yes. California law entitles trustees to reasonable compensation for their services. The amount depends on the complexity of the administration and the time required. The trust document itself may also specify the trustee’s compensation. We can help you determine what is appropriate for your situation.
What if a beneficiary is challenging the trust or my actions as trustee?
Beneficiary disputes can range from informal disagreements to formal court petitions. If a beneficiary is contesting the trust, challenging your actions, or threatening litigation, it is critical to seek legal counsel immediately. Our attorneys represent trustees in contested matters and help resolve disputes efficiently while protecting your interests.
Serving Trustees Across the San Fernando Valley and Los Angeles
Davis & Davis LLP is based in Porter Ranch, California, and guides trustees through the trust administration process throughout the San Fernando Valley, greater Los Angeles, and the state of California.