Trust Administration Attorneys in Valencia and Oxnard

Your Partner After the Loss of a Loved One

California trust administration is the process whereby your named successor trustee marshals your assets, pays off your creditors, and eventually distributes the assets in your trust estate to your beneficiaries. This sounds easy enough, but it usually isn't. There are hundreds of permutations that can occur during this process (depending on the trust, assets, people involved, etc.), but every trust administration requires “legal” notice be sent out to each person named in the trust and certain family members as well as timely filing of tax forms. Also, if there is any real estate in the trust, numerous legal documents changing ownership must be filed with the appropriate State Property Recorder and Assessor offices of each county where real estate is located.

The list of potential responsibilities required of a successor trustee are too numerous to count. Without a doubt, the legal responsibility and fiduciary obligations thrust upon successor trustees are sometimes onerous and can even be scary. That's because failure to comply with California trust laws by properly completing trust administration can result in extremely negative repercussions for beneficiaries, and successor trustees can be sued for their action or inaction.

Don't go it alone. After the death of a loved one, you have enough on your plate. When it comes to wrapping up a living trust, call (661) 306-2500 or contact us online today for all your trust administration needs.

Given all the tasks, obligations, and potential liability stemming from trust administration, sometimes people ask us, “What's the difference between trust administration and the 'dreaded' probate process?” The answer might surprise you: Not much. In either situation, almost all the same tasks must be done. However, probate generally takes twice as long to complete and costs significantly more — but not always! If there is one hidden secret about estate planning, this is it: Many people think when they complete their estate planning, they're done. And maybe they are, but the successor trustee(s) and beneficiary(ies) of the trust must go through the trust administration process. Believing that a trust somehow magically resolves itself when the Settlor of that trust dies is not only wrong, it can also be dangerous. To reiterate, it's dangerous because successor trustees have fiduciary obligations to comply with, and the failure to do so can easily trigger liability.

Who Should Be Named As The Successor Trustee To Administer Your Trust?

Great question! We commonly have conversations with married clients who have exactly two children. Sometimes, they grapple with whom to name as their successor trustee. Should the siblings be co-trustees, should the older child be named first successor trustee while the younger child is named the second successor trustee, or maybe it should be the “responsible” child, or someone else entirely? Parents are commonly concerned about who to choose and do not want to insult the child who is not chosen first as trustee. It sometimes comes as a surprise to our clients when we explain that the child who is not chosen is the lucky one. That's because the child who is chosen to serve as successor trustee has a lot of work to do, and potential liability to boot. The child who is not chosen can kick back and do nothing, and if upset, can even sue the successor trustee! We, as trust attorneys, do most of the heavy lifting in the trust administration process, but nevertheless, wrapping up a trust is a big job for trustees to carry out.

It's also important to note that trust administration comes in all shapes and sizes. Sometimes, the work is relatively easy to complete. Other times, it is extremely complicated. In our experience, the older the living trust, the more complicated it is to administer for married couples. That's because many, if not most, married couple California living trusts created prior to 2010 have sophisticated tax planning clauses that require dividing up assets and moving those assets into sub-trusts. They may also require the trustee to file extra tax returns every year that the surviving spouse is alive, as well as many other extraneous tasks. While this planning made sense in the 1990s and 2000s, it rarely makes sense today since “death taxes” (i.e., estate, gift, and generation-skipping taxes) do not apply to people who have less than $11.7 million in assets (over $23 million for a married couple in 2021). By the way, this highlights the point that you ought to really do yourself and your loved ones a favor and update your living trust if it is “old.”

For information about what needs to be done when assets are not held in a trust, visit our probate administration page.