SUCCESSOR TRUSTEE DUTIES

After the death of the settlor the successor trustee has a duty to keep the beneficiaries of the trust reasonably informed of the trust and its administration. This duty is met with notice and account. The first notice is mandatory under California law and is referred to as “notification by trustee.”

Notification by trustee must be made within 60 days from date of Settlor’s death. The notice provides the successor trustee’s contact information and informs the beneficiary of his or her right to a copy of the trust. Most importantly, this notice puts a time limit on a beneficiary’s right to contest the trust.

If the notice is served with a copy of the trust, the beneficiary has 60 days to contest the trust and on the 61st day this right is forfeited. If just notice is served, the beneficiary has 120 days to contest the trust and on the 121st day this right is forfeited. Failure of the successor trustee to serve this notice could result in personal liability. These deadlines are extended by about 5 days if service is by mail.

“Notice of a proposed action” is not mandatory but does protect the successor trustee from personal liability. This notice provides a description of the action to be taken and an explanation of the reasons for the action. A beneficiary has 45 days from the delivery of the notice of proposed action to object. If no beneficiary objects, the successor trustee is not liable to any beneficiary with respect to the proposed action.

To keep the beneficiaries informed an account is required at least annually and at the termination of the trust. An account is assets and liabilities as of date of death, plus receipts, less disbursements and distribution to equal assets and liabilities at the end of the account period. Beneficiaries of the trust have three years to bring a claim against the trustee based on information provided in the account.

In California, a successor trustee has the duty to keep beneficiaries of the trust reasonably informed of the trust and its administration. This duty is met with notification by trustee, notice of proposed action and an account. An account must be made at least annually and at the termination of the trust.

 

Author: Mark W. Bidwell

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