Can I Administer a Trust in California? Yes, and administering a trust may seem like a daunting and overwhelming task at first. However, you’ve been entrusted with a significant responsibility by someone who believes in your ability to manage their assets. With this responsibility, there are numerous steps you should incorporate into your process to make sure it is done correctly and efficiently.
Although this task may seem challenging, this article will provide some tips on how to administer a trust in California, as well as some important rules you should understand.
Why Is It Important To Understand Probate Laws When Administering A California Trust?
California probate laws require that the trustee act according to a specific set of rules when administering the trust. It is unwise for a trustee to make an already complicated process even more complex by inadvertently missing a step or breaking the rules which may leave you financially liable.
In simple terms, the trustee is required to deal with real property, the most common being the decedent’s home, must collect assets and get appraisals, and must pay debts and bills. Finally they must distribute the assets to beneficiaries and heirs according to the rules established in the trust.
What Are The Steps In Administering A Trust?
There are a series of specific steps that will allow a trustee to perform their duties correctly. They are as follows:
- The trustee must give a special notice to all heirs and beneficiaries. This can be done through the mail. Anyone who receives this special notice and wants to contest the trust must do so within a certain period of time.
- The trustee must identify assets. If assets are stolen, damaged, or lost, the trustee may become liable for the loss.
- The trustee must invest assets prudently and responsibly. As fiduciary, they have a legal fiduciary duty when investing assets.
- The trustee must obtain titles for assets listed in the trust. This is commonly used for assets such as homes or vehicles.
- The trustee usually will obtain appraisals for all assets listed in the trust. This can be a lengthy process and should be done as soon as possible.
- The trustee must pay off the remaining debts and bills to creditors if they are legitimate. If the trustee skips this step or misses a debt, they could be held liable.
- The trustee must file tax returns for the decedent.
- The trustee must account according to the trust’s terms and California law. In certain circumstances a trustee may seek court approval of the accounting and if so must format the accounting to conform to county rules and formats.
- Lastly, the trustee must create a distribution plan for heirs and beneficiaries and carry out that plan.
The trustee must also follow the steps written out in the trust exactly as they are written. The only exceptions are if the trust makes impossible, illegal, or unconscionable terms. While following these steps, the trustee may encounter disputes or trust contests. As the neutral party, the trustee may have to mediate and negotiate between parties regarding the dispute.
Focusing On The Complexity Of The Process And Why An Attorney Can Make The Process Easier
Administering a trust is no easy task, but if you’ve been provided such a responsibility, it means that a family member or a trusted friend believes in your ability. Regardless of their trust in you, it is still important to manage a trust with precise and reliable legal advice.
Given that administering a trust can lead to legal issues for the trustee if mistakes are made, it is highly advisable to retain a trust attorney for the process. The trustee has taken on a role as a mediator and organizer for the trust, and their willingness to serve in such a role should not also burden them with potential liability.
Another important reason to hire an attorney is if the trustee isn’t confident enough to organize and manage the trust. The trustee may have accepted their role out of a sense of duty or trust; however, once things are in motion and the process begins, it can be daunting for someone who lacks the experience. An experienced attorney can help move the process along efficiently and correctly to make no mistakes.
Lastly, if a will contest or disputes arise, an attorney can more easily navigate mediating between parties, or assisting the trustee. While the trustee should remain neutral and objective, this can be challenging if they are a family member or friend of the disputing parties. Instead, a trust attorney who has experience in handling disputes can step in and serve as a mediator.
The Emotional Benefit Of Hiring A California Trust Attorney
Hiring a trust attorney can relieve a trustee of the significant stress of such responsibility. It can also alleviate fears among family members or other beneficiaries about the accuracy in which a trust is managed and executed.
If you or a family member are looking to lessen the burden of managing a trust, contact the Law Office of Mark Gullotta for a consultation.