As a California trust and estate attorney I represent a lot of California trustees and executors in their fiduciary capacities. That is advising them of the laws of California so that they can carry out their job within the rules of law.
Notice I specify above a California trustee. The California Probate Code at Section 17002(a) defines this. The choice of what laws apply may be the law of another state, as would be provided in the trust instrument, but the proper Court would be in California if the trustee is handling the business here in the Golden State.
Having said that, the point of this article is to talk about the basics of the California trust administration process from the trustees perspective so that perspective trustees are aware of the issues and the liability that come with the job. While a California probate has very specific rules in the California probate code a California trust administration is not nearly so specific. Where the probate code says shall for probate cases it often says may in the similar trust administration sections. This can be problematic both for the trustee and for the beneficiaries.
The main issues in trust administration, from the trustees perspective, are as follows:
PROVIDING TRUST NOTICE: The California probate code is specific that the trustee shall provide notice of the trust administration to certain interested parties. This shall be done within 60 days of the trust becoming irrevocable which is typically death.
CREDITORS: There is a procedure in the California probate code to publish a notice of death in a newspaper, open a probate file and collect creditor claims there. It is a good idea to do this to cut off future liability to the trustee.
SALES: In a probate sales of property typically require putting the heirs on notice and, in some cases, even require Court approval. In trust administrations its quite different and the probate code says the trustee may put the beneficiaries on notice but does not require it. Again, as above if the trustee is looking to protect themselves supplying this notice would be wise.
ACCOUNTING: The California probate code does not require that an accounting be done. However, doing so will cut off the statue of limitations during which time someone may sue the trustee. Thus many trustees account to beneficiaries to cut off future liability.
This is just a summary of some of the major issues that a trustee should be aware of. Due to the extent of PERSONAL LIABILITY possible to the trustee it is imperative that they get legal counsel to represent them. In most cases this counsel will be paid by the trust assets themselves!
Contact John B Palley, if you are in need of a Trust Attorney California for Trustee Representation.