This guide walks you through trust administration process in California, step by step.
You’ll learn what the law requires, how long each phase usually takes, and practical ways to avoid common pitfalls that can cause delays or disputes.
What Is Trust Administration?
Trust administration is the process that begins after the person who created a trust (the settlor or trustor) dies. The successor trustee takes over management: identifying and protecting assets, paying debts and taxes, and distributing property to beneficiaries under the trust’s instructions.
Picture a living trust as a sealed container with clear directions for what happens after someone dies. Trust administration is simply carrying out those directions carefully and in order.
Unlike probate, trust administration most often happens outside of court: no judge supervising every step, no public hearings, and usually fewer delays. Privacy and efficiency are major reasons people use living trusts.
Still, court involvement can be necessary if disputes arise, if the trustee needs formal guidance, or when a specific issue requires judicial resolution.
Key takeaway
Trust administration is typically a private, trustee-led process that is usually faster, less costly, and more confidential than probate. Courts remain available, however, to resolve disputes or provide instruction when needed.
Trust Administration vs. Probate: Understanding the Difference
The core difference is court involvement. Probate requires ongoing court supervision and often takes 12 to 18 months in California.
Trust administration typically occurs outside the courts and typically takes 6 to 12 months, though court intervention is possible when disputes or complex issues arise.
Many families find the contrast surprising. Here’s a side-by-side look:
Factor | Trust Administration | Probate |
|---|---|---|
Court Involvement | Usually not required | Required throughout |
Timeline | 6-12 months typical | 12-18+ months |
Privacy | Private process | Public record |
Cost | Generally lower | Statutory fees apply |
Beneficiary Access | Weeks to months | After court approval |
The Trust Administration Process: Step by Step
In California, the trust administration process generally follows eight key steps:
- Obtaining death certificates,
- Locating and reviewing the trust
- Notifying beneficiaries
- Inventorying and securing assets
- Paying debts and taxes,
- Filling required tax returns,
- Preparing an accounting, and
- Distributing assets.
Below, we walk through each step and what to expect.
Step 1: Obtain Death Certificates and Locate the Trust
Start by ordering certified copies of the death certificate. Multiple institutions (banks, brokers, and government agencies) typically require original certified copies, so plan to order at least 10-15 copies.
Then locate the original trust document, any amendments, and a certificate of trust (also known as a trust certification). These are often kept in a safe deposit box, a home safe, or with the attorney who prepared the trust.
Step 2: Review the Trust Document Thoroughly
Before you act, read the trust document from start to finish. Pay special attention to:
- Who the beneficiaries are and what each is entitled to receive
- Specific gifts (personal items or cash bequests)
- Conditions on distributions (age limits, installment schedules)
- Your powers and duties as successor trustee
- Whether the trustee is entitled to compensation
- Any special instructions tied to particular assets
The trust document is the governing document; everything you do as a trustee should follow its terms.
Step 3: Notify Beneficiaries (Required by California Law)
California law requires you to notify all beneficiaries and heirs within 60 days after the trust becomes irrevocable, which generally means within 60 days of the settlor’s death. This comes from California Probate Code Section 16061.7.
The notice must include specific information:
- The settlor’s identity
- The date the trust was executed
- The trustee’s name, address, and phone number
- The address of the trust’s principal place of administration
- A statement that the recipient may request a copy of the trust terms
- A statement that any contest must be filed within 120 days after the notice is served
CALIFORNIA LAW
Under Probate Code Section 16061.8, a beneficiary or heir has 120 days from the date the Section 16061.7 notice is served (by mail or personal delivery) to file a court action contesting the trust. After that 120-day window closes, challenges to the trust’s validity are significantly narrower. That’s why timely, correct notice is essential for trustees.
Step 4: Inventory and Secure Trust Assets
- Real property (homes, rentals, vacant land)
- Bank accounts and certificates of deposit
- Investment and brokerage accounts
- Business interests
- Vehicles, boats, and recreational vehicles
- High-value personal property (jewelry, art, collectibles)
- Life insurance proceeds payable to the trust
Record the value of each asset as of the date of death—this matters for tax reporting and for your final accounting to beneficiaries.
Also, take steps to protect assets: maintain insurance, change locks if needed, and secure valuable items. As a trustee, you have a fiduciary duty to safeguard trust property and act in the beneficiaries’ best interests.
Step 5: Obtain a Tax Identification Number
When the trust becomes irrevocable after the settlor’s death, it generally needs its own tax identification number—an Employer Identification Number (EIN). You can apply for an EIN for free on the IRS website and usually receive it immediately online.
Use that EIN to open a trust bank account for all trust-related income and expenses. Keeping transactions in one account simplifies record-keeping and the accounting you’ll provide to beneficiaries.
Step 6: Pay Debts, Expenses, and Taxes
Before making distributions, you must pay valid debts and expenses. Common items include:
- Funeral and burial costs
- Outstanding medical bills
- Credit card balances and other liabilities
- Ongoing expenses (property taxes, insurance, utilities)
- Professional fees (attorney, accountant, appraiser)
- Income taxes owed by the decedent
You’ll also need to file tax returns. Typically, this includes the decedent’s final personal income tax return (Form 1040) and possibly a fiduciary income tax return for the trust (Form 1041).
A federal estate tax return (Form 706) is required only for estates above the federal exemption amount ($13.61 million in 2024).
Step 7: Prepare a Trust Accounting
Before final distributions, prepare a clear, detailed accounting for beneficiaries. A proper trust accounting should show:
- All assets that came into the trust
- All income received during administration
- All expenses paid
- All distributions made
- Assets remaining for final distribution
Transparency matters. Beneficiaries have a right to review how trust funds are managed, and a well-organized accounting system reduces the risk of disputes.
Under California Probate Code Section 16062, trustees of irrevocable trusts typically must provide an accounting to income beneficiaries at least annually and to remainder beneficiaries when their interest ends.
The trust document can modify these rules, and beneficiaries may waive the right to an accounting in writing. Even with a waiver, a court can still order an accounting if a beneficiary shows good cause. So keep careful records throughout the trust administration process.
Step 8: Distribute Assets to Beneficiaries
After debts are paid, taxes are filed, and the accounting is complete, distribute the remaining assets in accordance with the trust’s directions.
Some distributions are straightforward (a percentage split); others are more complex (specific items to specific individuals or ongoing trusts for minors or beneficiaries with special needs).
When transferring real property, prepare and record a deed from the trust to the beneficiary. For financial accounts, work with each institution to transfer or distribute funds correctly.
Many trustees request that beneficiaries sign a receipt and release acknowledging receipt of their distribution and releasing the trustee from further liability. While not always required, a signed receipt provides extra protection for the trustee.
Trust Administration Process Timeline: What to Expect
Most California trust administrations take between 6 and 12 months. Simple trusts with liquid assets can wrap up in a few months; trusts with real property, businesses, or complex tax issues can take a year or longer.
Phase | Typical Timeline | Key Activities |
|---|---|---|
Initial Phase | Weeks 1-8 | Notify beneficiaries, secure assets, and get an EIN |
Contest Period | 120 days from notice | Wait for the contest deadline to pass |
Administration | Months 3-9 | Pay debts, file taxes, manage assets |
Distribution | Months 6-12 | Final accounting, distribute assets |
Frequently Asked Questions About the Trust Administration Process
Most trust administrations take 6 to 12 months. Simple trusts with liquid assets can be completed in a few months. Complex trusts involving real property sales, business interests, or tax issues may take a year or longer.
In most cases, beneficiaries do not pay income tax on inherited assets. However, if the trust earns income during administration, that income may be taxable. California does not have a state inheritance tax, and the federal estate tax only applies to very large estates (those exceeding $13.61 million in 2024).
Yes. The trust document typically specifies whether and how the trustee will be compensated. If the trust is silent on compensation, California law allows trustees to receive reasonable compensation for their services. Professional trustees and corporate trustees are always compensated for their work.
If assets were not transferred into the trust before the settlor’s death, those assets may need to go through probate. In some cases, a petition to the court (called a Heggstad petition, based on Estate of Heggstad) may allow assets to be added to the trust after death without full probate, but this requires court approval.
A successor trustee manages trust assets according to the trust’s instructions: notify beneficiaries, secure and inventory assets, pay debts and taxes, prepare an accounting, and distribute assets. The trustee must act in beneficiaries’ best interests and follow legal requirements while keeping communication transparent.
Yes. California law allows beneficiaries to contest a trust within 120 days of receiving the required notice. If a contest is filed, administration may need to pause until the dispute is resolved, which is why proper, timely notice is so important.
If a trustee fails in their duties, they can be held personally liable for losses to the trust or beneficiaries. Beneficiaries can petition the court to remove a trustee who is mismanaging assets or acting against their interests. In serious cases, trustees may face legal claims for breach of fiduciary duty and possible financial penalties.
Yes. California law generally requires trustees of irrevocable trusts to provide an accounting to income beneficiaries at least annually and to remainder beneficiaries when their interest ends. The accounting must detail assets, income, expenses, and distributions. The trust document can alter these rules, and beneficiaries can waive accounting rights in writing, but courts can still order an accounting for good cause.
Start by listening and explaining how the distribution was calculated. Provide a detailed accounting if needed. If disagreements continue, consider mediation or legal advice to resolve the issue. Clear records and open communication often prevent escalation.
A trustee may delegate specific tasks to qualified professionals—attorneys, accountants, or financial managers—but cannot completely give up fiduciary responsibility. The trustee remains ultimately accountable and must supervise any delegated work.
Common Mistakes to Avoid in the Trust Administration Process
Even careful trustees can slip up. Watch for these common errors:
Missing the 60-Day Notification Deadline
California requires beneficiary notice within 60 days. Missing that deadline can increase legal exposure and extend the window for challenges.
Distributing Assets Too Quickly
Don’t rush distributions. If assets are paid out before debts are settled, taxes filed, or the 120-day contest period has passed, the trustee can be personally liable for later claims or unpaid obligations.
Commingling Personal and Trust Funds
Never mix trust funds with your personal accounts. Open a dedicated trust bank account and keep meticulous records. Commingling is a breach of fiduciary duty.
Failing to Keep Beneficiaries Informed
Beneficiaries grow frustrated when they’re left in the dark. Regular, clear communication—even when there’s no major update—helps prevent misunderstandings and disputes.
WARNING
As trustee, you have a fiduciary duty to act in beneficiaries’ best interests. Failure to do so can lead to personal liability. When unsure, consult an experienced trust administration attorney.
When Should You Hire a Trust Administration Attorney?
Not every trust administration needs an attorney, but many benefit from professional help.
Consider hiring a Trust Administration Lawyer if:
- The trust owns real property that must be sold or transferred
- There are likely disputes among beneficiaries
- The estate raises significant tax issues
- Business interests are involved
- Beneficiaries live in different states or countries
- The trust includes ongoing trusts for minors or beneficiaries with special needs
- You’re unsure about your duties or the correct process
An experienced trust administration attorney can guide you, help you avoid costly mistakes, and ensure you meet your fiduciary obligations.
Taking the Next Step in the Trust Administration Process
Trust administration can feel overwhelming, especially while you’re grieving. With clear steps and careful record-keeping, the process is manageable. Focus on following the trust document, meeting legal deadlines, and communicating with beneficiaries.
If you’ve been named successor trustee and want help, or if you’re a beneficiary with questions, consulting an experienced California trust administration attorney can bring clarity and peace of mind.
Key Takeaways in the Trust Administration Process
- Trust administration usually happens outside of probate court, making it faster and more private than probate, though courts remain available when needed.
- California law requires beneficiary notification within 60 days of the settlor’s death.
- Beneficiaries have 120 days from the date the required notice is served to contest the trust.
- As trustee, you have a fiduciary duty to act in the beneficiaries’ best interests.
- Most trust administrations take 6 to 12 months to complete
- Professional guidance can help you avoid costly mistakes
Understanding the trust administration process is key to a smooth transfer of assets and to fulfilling your fiduciary duties responsibly.
Follow the steps above, keep careful records, and seek professional help when needed to minimize disputes and delays. Taking these actions will help you manage the process with confidence.
If someone recently named you as successor trustee, you may be feeling overwhelmed, especially while grieving.
The good news: with clear guidance and the right help, administering a trust in California is usually manageable and often simpler than probate.
Disclaimer
This article provides general information about the California trust administration process for educational purposes only. It is not legal advice and does not create an attorney–client relationship.
Trust administration process requirements depend on the specific trust terms and circumstances. For guidance tailored to your situation, consult a qualified California trust administration attorney at Opelon LLP for experienced advice on the trust administration process.
