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What Happens During A California Trust Administration?

12/23/2022 | Trust Administration
What Happens During A California Trust Administration

When a trust creator (grantor) passes away, the trustee must take certain steps to manage and administer the trust. If you are a trustee, beneficiary, or heir, it’s important to have some idea of what to expect during the trust administration process. Therefore, as a concerned party, you need to know: What happens during a California trust administration?

The first thing to know is that every California trust is unique and they often vary in terms of their size and complexity. However, it’s important to recognize that most trust administrations are complicated. Therefore, it’s in the best interest to work with an experienced California trust attorney during a trust administration. The experienced California trust attorneys of the Law Offices of Alice  A. Salvo have the experience you need to navigate the trust administration process. Please get in touch with us online or by phone to schedule an appointment today.

What is a California Trust?

A California trust is a device used by a trust creator (grantor or settlor) for the benefit of named beneficiaries. The grantor transfers ownership of assets into a trust that a designated trustee oversees. The trustee is responsible for managing the trust, making disbursements to beneficiaries, and ensuring that the trust terms are carried out.

What is a California Trust Administration?

A California trust administration is the process that the trustee will follow to attend to the trust after the grantor passes away. Trust administration involves completing several tasks, and it’s important to have the advice of an experienced California trust attorney at every stage.

What Happens During a California Trust Administration?

When the trust grantor passes away, the trustee will have several responsibilities including:

  • Providing notice to the right parties and authorities
  • Organizing and gathering important documents
  • Assessing and accounting for trust assets
  • Managing federal tax responsibilities
  • Protecting trust assets and paying applicable debts
  • Distributing trust assets to the beneficiaries

Notify the beneficiaries of the trust administration: When the trust administration begins, the trustee is required by California law to notify the trust beneficiaries and the grantor’s heirs. The purpose of the notification is to let these individuals know the status and provide them with an opportunity to contest the trust.

Written notices must be sent out to beneficiaries of the trust and the grantor’s heirs within a certain number of days from the grantor’s death. The grantor’s heirs and trust beneficiaries will have a set period from the receiving date to contest the trust.

Organize and gather important documents: These typically include a copy of the death certificate, the trust document, and other essential estate planning documents. The trustee will need to organize and gather these and all other necessary documents.

Asset Accounting: The trust assets will remain in the trust when the grantor dies. The trustee will be responsible for protecting this property and ensuring it remains as the grantor devised. During the trust administration, the trustee should conduct an accounting of the assets and trust income. This will include identifying the existing trust property and having it valued. In addition, the trustee must accurately report any income earned by the trust to the IRS.

Medi-Cal Notification: If the decedent was a Medi-Cal (California Medicaid) recipient, the grantor’s executor or the trustee will have a specific number of days from the date of death to file a notice of the grantor’s death with Medi-Cal.

Real Property Notice: The trustee will have a certain number of days after the death to file a Notice of Death of Real Property to effectuate a change in ownership. This notice will be filed with the death certificate. This part of the trust administration process can be complicated, and trustees usually need the help of an attorney.

Debts and Liabilities

The trustee must also settle the grantor’s debts and liabilities during a California trust administration. This will involve tracking and recording trust deposits and distributions.

Asset Distribution

Once all of the required trust administration tasks are completed, the trustee can distribute the trust assets according to the trust terms.

These are just some of the requirements for a California trust administration. Depending on the trust, the trustee may have other tasks to complete. If you are a trustee, trust administrator, beneficiary, or heir to a California trust, you should consult with an experienced California trust attorney. Your trust lawyer can help you protect your interests and ensure that the trust is properly administered.

At the Law Offices of Alice A. Salvo, we are experienced California trust attorneys who understand how trust administration works and can help. Please call us today at 818-676-9572 to schedule your free consultation.