Every trust is unique to the creator of the trust. The purpose and intention of a trust vary based on the trust.
The information on this page is specific to trust administration in California.
There are many types of trusts. The following are just a few types of trusts:
- Family trust
- Bypass trust
- Charitable remainder trusts
- Special needs trust
- Marital trust
- Irrevocable trusts QTIP trust
- Revocable living trust
- Survivors trust
- Revocable trusts
- Life insurance trusts
- Pet trust
- Trusts amendments
Revocable or irrevocable types of trusts
Always consult with a trust attorney for legal advice regarding trust law. The attorney can help many things. Among them are:
- Understanding the wills and trusts
- Estate administration
- Certifications of trust
- Court proceedings
- Trust disputes
- Fiduciary duties
- Final distributions
Seek advice from a tax professional that can help with:
- Obtaining a tax identification number
- Estate tax returns
- Trust income
- Income tax returns
- Property tax
- Applicable exclusion amount
- Federal estate tax return
- Capital gain
- Gift tax
- Generation-skipping transfer tax
- Marital deduction
- IRS forms
Trust Administration Process with Trusts
The whole trust process is similar with all trusts, however, will vary based upon the trust’s assets.
The tasks mentioned here are specific to California.
When the creator of a living dies and you are the successor trustee, the trust attorney will provide you with a full Trust Checklist.
After reading the trust document you will need to decide if you will proceed with the role as trustee.
Collect and Review:
- Original Will, Trust document, and the Certifications of Trust.
- Get several death certificates.
- Pension statements, the 401k, IRA, annuities, life insurance policies.
- Other documents specific to the deceased person such as military documents or divorce settlements.
- The most recent state and federal income tax returns
- Title of vehicles or vehicle loan documents
- Deeds to real estate
- Bank account and other financial statements
Steps to Take:
- Make a list of all trust estate assets and expenses.
- Be sure to check safety deposit boxes.
- How the assets titled. Are they trust accounts held in the name of the trust or in the name of the deceased person?
- Determine if there might be trust disputes or claims by any heirs.
- Open a trust bank account
- File the original Will and a death certificate with the court within 30 days of death.
- Send notice to trust beneficiaries and heirs. California probate code section 16061.7 requires the notice gets sent within 60 days of the death of trustee.
- In most case, the funeral director reports the death.
- Inventory the assets and determine value
- If the trust owns real property record an affidavit of death of trustee with a death certificate with the county recorder.
- File a claim for reassessment exclusion with the county assessor if real property transfers from a parent to a child to avoid reassessment of the property.
- Determine if any property is subject to probate
- Change title of assets
- Collect on insurance policies, pensions, IRA’s, Annuities
- Keep accurate records of all accounts and accounting.
- Pay expenses and debts of the trust, including creditor claims
- Consult with a tax professional regarding local, state and federal estate tax obligations
- Sell real property or other assets directed by the trust
- Complete trust accounting
- Provide a copy of accounting to beneficiaries
- Distribute property as directed in the trust
- Get a receipt for distributed property
- After all trust administration tasks are complete, close the trust
Eligible Trust Benefits to Surviving Family in California
A surviving spouse or a child may be eligible for social security death benefits.
Contact the local office to report a death or apply for survivor’s benefits.
Married couples can shelter estate taxes with a portability election.
The surviving spouse can port over the deceased spouse’s estate tax exclusion. This can only get done if the surviving spouse files a form 706 estate tax return and makes the portability election.
A trustee’s duty in managing trust property and administrative trust duties is to act with prudent care.
Prudent means careful or wise and exercising good judgment.
When selling real property, a trustee is wise to hire a real estate professional who specializes in probate and trust sales.
All trusts are not alike. All real property is not the same. And all real estate agents do not have the specialized knowledge necessary to sell real property held in trust.
The real estate agent will provide a certified death certificate and certification of trust to the title company.
There are specific forms that must get used and disclosure exemptions apply when selling trust property.
Real property transfer taxes get prorated at the close of escrow.
Always consult with an attorney and CPA for guidance. Let the attorney know if you feel you are not qualified or cable of acting as trustee of a living trust.
The probate code and trust and estate laws may be different for a California estate than in other states across the nation.
Local court rules for San Francisco and Los Angeles may differ from Santa Clara County.
If you need help with matters regarding trust administration in California, probate law, a power of attorney to make medical decisions, or real estate law, let us know.
We are happy to recommend an attorney or tax professional.