What you Must Know as a Successor Trustee

​When the last Trustee has deceased, the designated Successor Trustee is burdened with the disposition of the assets within the Trust and there are specific requirements of the Successor Trustee(s) under the California Probate Code 16061.7

Minimum Required Successor Trustee Tasks: 

• Trustee should get multiple copies of death certificate(s) 
• Trustee must remove the prior Trustee’s name from all assets held in the Trust
  • Affidavit of Change of Trustee for each property which is recorded
  • Removal of Trustee’s name from bank and investment accounts 

 
Minimum Required Successor Trustee Tasks: Probate Code 16061.7 

• Notification under California Probate Code §16061.7 requires a Trustee to send a notice to all beneficiaries of a trust when the trust becomes irrevocable within 60 days of the trust becoming irrevocable (from the Date of Death of the deceased Trustee(s).
• Sent to everyone who would inherit in the absence of the Trust 
• Sent to everyone named in the Trust and all amendments

 
The “16061.7 Notice” must include the following information: 

• Identity of the settlor(s) (aka grantor, trustor or trust maker) of the trust 
• Date the Trust was signed 
• Trustee(s) name, address, and telephone number 
• Address of the physical location where the “principal place of administration of the trust” is located 
• Any additional information that may be expressly required by the terms of the trust instrument 
• Statement recipient is entitled, upon reasonable request to the trustee, to receive from the trustee a true and complete copy of the terms of the trust

 
Minimum Required Successor Trustee Tasks: TIN and Assessor
 

• Trustee should stop using Decedent’s SSN #
  • Trustee can complete Form SS4 and get a TIN # for the Trust 
• If Decedent was a property owner, Trustee must notify County Assessor’s Office within 150 days of death which is a Change In Ownership (CIO)
• Change in Ownership Statement Death of Real Property Owner
  Form (BOE-502-D/ASSR-176)
• Failure to timely file can result in penalties
• The penalty is 10% of the taxes, applicable to the new assessed value or $100, whichever is greater
• If not willful, $5K cap if homeowners’ exemption is claimed, $20K if no homeowners exemption claimed on the subject property

 
Successor Trustee Duties

• Keep the trust property separate from other property 
• Designate property as property of the trust 
• Enforce trust claims & defend actions against the trust 
• Not to delegate to others the performance of acts that the trustee can reasonably be required personally to perform 
• (When 2 or more Trustees) participate in the administration of the trust: keep a co-trustee from breaching the trust 
• Duty to apply the full extent of the trustee’s skills 
• The trustee must act in the best interests of the beneficiaries and must not use their position for personal gain 
• The trustee must file any necessary tax returns and pay any taxes that are due to be paid from the trust or K1 the beneficiaries 
• The trustee must make distributions to the beneficiaries according to the terms of the trust and in a timely manner 
• The trustee is responsible for managing the assets in the trust according to the terms laid out in the trust document 
• The trustee must keep accurate records (in a way that your CPA will think is ludicrous) of the trust assets and transactions and make these records available to the beneficiaries upon request 
• The trustee must provide the beneficiaries with regular accountings of the trust assets and transactions or have such accounting waived
  
  

Record Keeping and Accounting 

• Trustees must account to the beneficiaries 
• An accounting is like a big bank statement. There is a starting balance, receipts, expenses, and an ending balance. 
• All these numbers have to add up correctly…If they don’t the Trustee is 100% personally liable
  
  

Some Record Keeping Tips
 
1.Don’t withdraw cash from the trust checking account!

1. Consider an interest-bearing checking account
2. Consider a separate checkbook register for the account where you record the date, amount, and source of each deposit as well as expenses
3. Balance the checking account monthly
4. Maintain careful records of all transactions

Successor Trustee Requirements For Real Property

• Obtain multiple copies of Death Certificate(s)
• Obtain Trust TIN identification - Complete IRS Form SS4
• Remove prior Trustees names from all assets held in the Trust
  • Title company will record Affidavit of Change of Trustee
  • Include bank and investment accounts name change
• Send Notification to all beneficiaries - due no later than 60 days from date of death
• Notify Assessor’s Office - Change of Ownership Statement - due no later than 150 days from date of death
  • Form BOE-502D/ASSR-176

Realtor tasks:

• Open Presale Escrow
  • Send Death Certificate(s) and Trust to Title company for approval
  • Obtain Preliminary Title Report 
  • Title change amendment recorded by title company

 
WE RECOMMEND CONSULTING WITH LEGAL COUNSEL TO CONFIRM & VERIFY THE ABOVE INFO
 
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