The Basics of Trust Administration

Trust Administration refers to the management and distribution of trust property by a legally designated person, usually referred to as a trustee. This is to be done in the best interests of the beneficiaries of the trust estate and in accordance with the trustor’s wishes. When property, especially but not exclusively real estate, is to be transferred from a deceased loved one’s trust to his or her beneficiaries, the property must be temporarily put under the control of a successor trustee before being distributed according to trust guidelines. As long as the trust is not successfully contested, the successor trustee has all the powers given to him or her by that trust.

California state law puts trustees under obligation to perform certain duties and bar them from taking any actions not deemed in the best interests of the trust. A line of successor trustees are designated in the trust. They are only given the power to act if the first-named trustee or trustees either pass away or become incapacitated.

Trustees are expected to administer the property under their care in accordance with the trust and in conformity to state law. They must properly notify all beneficiaries and are obligated to manage the trust estate in a financially responsive manner. They must also avoid creating any conflict of interest or benefiting in any way from their position as temporary property holder. They must also pay the taxes on the property, settle all relevant debts, and keep detailed financial records. If they violate the terms of the trust or any of their duties as a trustee, their acts could be declared non-binding and can be removed by the beneficiaries. Additionally, beneficiaries also have the right to request and receive from the trustee, a properly constructed financial disclosure statement.

Given the complexity of California law regarding trust administration, it is advisable to get expert legal advice to guide you through the process. Located in Irvine, California, and serving all areas in and around Orange County, Mortensen & Reinheimer, PC is a leading name in estate planning. They can assist you in fulfilling the duties assigned to you as a trustee and make sure that you are in accordance with the law. To learn more or to schedule a free consultation, call Mortensen & Reinheimer, PC at 714-384-6053, or fill out the online request form.

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