You've just become the trustee. Here's what the first 90 days looks like.
When Lauren's dad died in August, she already knew she was named as successor trustee. She had a general sense of what a trust was, more or less. But she had no idea what exactly a trustee was supposed to do. What would happen to her dad’s stuff? Would she have to sell his house right away? What paperwork would she need to file, and with whom?
A lot of people end up where Lauren was. When a parent has a living trust, the successor trustee usually takes over at the parent’s death without going to court. While this is a big part of why people set up trusts in the first place, it also means that nobody hands the successor trustee a schedule when they take over. But, the deadlines that do exist start running whether you know about them or not.
As a note, this article assumes we are in the situation where someone dies with no surviving spouse. When a spouse survives, things work differently. Further, the information below is not limited to where a surviving child is acting as Trustee.
Also, these are all steps that an attorney can assist with, so don’t assume you need to complete all of the following tasks alone.
Photo by Vlad Khmara on Unsplash
The first few weeks
Start by ordering at least five certified death certificates, since some institutions you contact will want their own copy (and getting more later is more annoying than ordering too many at the outset). The funeral home can order the first set, but you can request more from the California department of Public Health if you ever need.
Find the original trust and every amendment, because an amendment changes who gets what just as much as the original did. Keep your parent's mail coming, or go to the post office and have it forwarded to you, since the mail is often how trustees find the accounts and bills that nobody mentioned.
Once your parent dies, the trust can't be changed anymore, and the IRS treats it as its own taxpayer. Your parent's Social Security number stops being the trust's tax ID, so you'll apply for a new employer identification number (or “EIN”) for the trust. Open a trust bank account under that number and run every trust dollar through it, including the property taxes and utility bills on the house. It might feel simpler to pay a few bills from your own account and sort it out later. Mixing your money with the trust's is one of the most common ways trustees get into trouble, though, and it makes the report you'll owe the beneficiaries much harder to put together.
If the house is in the trust, you'll usually record an Affidavit of Death of Trustee with the county (Registrar/Clerk/Recorder), along with a certified death certificate, to show that you now hold title as trustee. Banks will probably ask for a certification of trust, a short summary that shows you're the trustee without handing over the whole document. It's also worth calling the homeowner's insurance company early, since a house that sits empty can be treated differently under some policies.
The notice and the contest clock
Within 60 days of the death, California requires the trustee to serve a written notice, called the notification by trustee, under Probate Code section 16061.7. It goes to every beneficiary named in the trust, and it also goes to every heir, meaning the people who would have inherited under California law if your parent had no trust at all. That second group surprises a lot of trustees. If your dad left everything to three of his kids but there's a fourth he hadn't spoken to in twenty years, that fourth child still gets the notice. The trust can't excuse you from sending it, either.
A California trustee has 60 days after the death to serve the trustee's notice on every beneficiary and every heir.
The notice has required contents, including a warning about the deadline to contest. A person who gets the notice has 120 days to demand a copy of the trust and/or contest the trust. If they get a copy of the trust during those 120 days, they have 60 days from then instead to contest, whichever ends later. That's why a lot of trustees mail a copy of the trust with the notice. Otherwise, a sibling can ask for the trust on day 115 and get about two more months to contest.
A California trust can be contested for 120 days after the trustee's notice is served, or 60 days after a copy of the trust arrives during those 120 days, whichever ends later.
Sending the notice on time protects you, too. A trustee who fails to serve it can be responsible for the damages, attorney's fees, and costs that come from the failure, and the 120-day limit never starts for the person who was missed. If your parent ever received Medi-Cal, there's also a separate notice of death to the state Department of Health Care Services, generally due within 90 days.
A value on the house
Every trust asset needs a value as of the date of death, and the house usually matters most. For income tax purposes, what's in a parent's trust generally gets a new “basis” value equal to what it was worth on the date of death, which is helpful in decreasing future capital gains taxes. That's what people mean by a “step-up in basis.” Say your mom bought her house in 1988 for $190,000 and it was worth $1.4 million when she died. The trust's basis generally resets to $1.4 million, so if the trust sells a few months later for about that price, there may be little or no capital gains tax due. An appraisal done now by a licensed appraiser is much easier to stand behind than one pieced together years later. While you're at it, ask the banks for statements showing what each account held on the date of death.
The county assessor treats the death as a change in ownership too. The trustee has to file a Change in Ownership Statement, form BOE-502-D, within 150 days of the death, even when the house was in a trust. In most cases, the house will then be reassessed. If one of the children is going to live in it as their main home, Proposition 19 may let them keep some or all of the parent's lower tax base. For transfers from February 16, 2025 through February 15, 2027, the break covers a home worth up to the parent's taxable value plus $1,044,586. The child has to actually move in and file the claim forms. A rental or a vacation home doesn't qualify.
A Change in Ownership Statement (BOE-502-D) is due to the county assessor within 150 days of the death, even when the house is held in a trust.
Holding off on distributions
For a lot of trustees, the hardest part of the first 90 days is the phone call from a brother or sister asking when they'll get their share. It's a fair question, and, in most trusts, the answer for the first several months is that it's still too early to tell.
In California, what's in a parent's trust can be used to pay the parent's debts when there isn't enough outside the trust to cover them. That includes things like final medical bills, credit cards, and income taxes for the year your parent died. Creditors generally have one year from the date of death to bring a claim. A trustee can shorten that window by filing a notice to creditors with the court, running it in the paper, and mailing it to known creditors. After that, most claims have to come in within four months of the first time the notice runs, or 60 days after a creditor gets it in the mail, whichever is later. If the trustee skips that step and hands out the money anyway, the people who got it can be on the hook for the parent's unpaid debts. That can mean asking a brother or sister to give part of it back.
Creditors of someone who died in California generally have one year from the date of death to bring a claim, unless the trustee publishes a notice to creditors.
The contest window is the other reason to wait, and California law specifically lets a trustee take it into account when deciding when to distribute. Some trustees make a small partial payout once the picture is clear and hold back enough to cover anything that might still come in. That's a judgment call you should consider before you write the check.
These are the dates most trustees run into early:
Within 60 days of the death: Serve the notification by trustee on every beneficiary and heir.
Within 90 days, if your parent ever received Medi-Cal: Send notice of the death to the Department of Health Care Services.
About 120 days after the notice is served: The usual deadline to contest the trust passes.
Within 150 days of the death: File the BOE-502-D with the county assessor for each California property.
One year after the death: the general deadline for creditor claims, if no notice to creditors was published.
We hope this has been a good overview for you if you’re the successor trustee or curious about what their responsibilities are. If you've just found your name in a parent's trust and need help walking through the first few months with you, reach out to our team at Laurel Trust Law. We’re glad to answer your questions.