When a person passes away and they created a trust to hold their assets, the successor trustee must take certain steps to gain control of bank and brokerage accounts, real property and other assets. Title to the assets remains in the name of the trust, but the successor trustee needs to be reflected on title so that assets can be managed, sold if necessary, and distributed.
A trust certification stating the new trustee and other important details is the first step in gaining control over accounts held by the deceased settlor of the trust. For real property, an affidavit of death of trustee must be signed and recorded so the new trustee can manage, sell and/or distribute property to the beneficiaries.
A trustee is required by the California Probate Code to give notice to all trust beneficiaries and legal heirs within 60 days of the date of death. A beneficiary or heir is entitled to receive a copy of the trust and will upon request. Accounts are retitled, debts are paid, and personal property is donated, sold or distributed as the trust or will provides. Some trusts provide for the creation of subtrusts such as a disclaimer trust, a bypass trust, and a survivor’s trust. Appraisals must be obtained and assets allocated to the subtrusts as the trust provides.
A successor trustee will invest and manage the trust assets, file income and estate tax returns, liquidate assets, distribute assets or hold in trust for the benefit of beneficiaries until such time as the trust provides that they are to be distributed. If a trustee mismanages the assets or takes actions that are improper, they may be personally liable for any losses that occur. A trustee should have an attorney, a tax advisor, and possibly a financial advisor, guide them in the management of a trust.