Trust Administration Guide

What a Successor Trustee Does: First 90 Days

When a trust settlor dies, the successor trustee takes over immediately. Several of your duties have hard legal deadlines. This guide walks through the first three months.

By Alex Wong, Esq. · Updated July 2026 · California Probate Code §16061.7, §215, §15681

Two deadlines that cannot be missed

60 days: Send the required beneficiary notice under Probate Code §16061.7. This starts a 120-day contest window for beneficiaries. 150 days: File the Change in Ownership Statement with the county assessor for any real property. Both deadlines run from the date of death.

Your 90-day checklist

1
Week 1

Secure assets and gather documents

Locate the original trust document and all amendments.
Obtain the death certificate. Order at least 10 to 15 certified copies — banks, brokerages, and real estate transactions each require an original.
Identify all trust assets: real property, bank accounts, brokerage accounts, business interests, vehicles, and personal property.
Secure the home and valuables. Change locks if needed.
Notify the post office to forward mail.
Cancel recurring charges and subscriptions that do not need to continue during administration.
Contact the decedent's employer and any pension or retirement plan administrators to stop payments or initiate survivor benefits.
2
Weeks 2 – 4

Notify beneficiaries and set up administration

Send the required beneficiary notice under California Probate Code section 16061.7. The notice must be sent within 60 days of the date the trust becomes irrevocable. It must identify the trust, the trustee, and advise recipients that they have 120 days from service (or 60 days from receipt of a copy of the trust, whichever is later) to contest the trust. This is a hard deadline.
Notify the Director of Health Care Services (California Probate Code section 215) if the decedent received Medi-Cal benefits. Failure to do so can result in personal liability for the trustee.
Apply for a federal Employer Identification Number (EIN) for the now-irrevocable trust. The IRS requires a separate tax ID for the trust after the settlor's death.
Open a trust checking account using the EIN. All trust income and expenses during administration flow through this account.
Review the trust document carefully. Identify the distribution instructions, conditions, and your specific duties as trustee.
3
Month 2

Value assets and handle real property

Obtain date-of-death values for all assets. Financial institutions will provide account statements. Real property typically requires a formal appraisal (a "date of death" appraisal) from a licensed appraiser.
File a Change in Ownership Statement (BOE-502-D) with the county assessor within 150 days of the date of death for any real property. Failure to file can result in penalties. The form triggers a reassessment evaluation under Proposition 19 if applicable.
Identify any creditors of the estate. You are generally not required to publish a creditor notice if administering a trust (unlike probate), but you must address known creditors before distributing assets.
Contact the decedent's CPA to coordinate filing the final individual income tax return (Form 1040) and any trust income tax returns (Form 1041) that may be required.
Review any pending bills, insurance policies, and property taxes. Keep real property insured. Pay property taxes before they become delinquent.
4
Month 3

Prepare for distribution

Compile a full accounting of all assets, income received, and expenses paid since the date of death. Beneficiaries are entitled to a trust accounting under California Probate Code section 16063.
Determine whether any assets must be sold to fund distributions or pay debts. Coordinate with beneficiaries if real property is involved.
Prepare and send the final trust accounting to all beneficiaries before distributing. Give beneficiaries a reasonable time to review and object.
Make distributions in accordance with the trust terms. Document every distribution with written receipts signed by the beneficiaries.
File all required tax returns before making final distributions. The trustee is personally liable for unpaid taxes if assets are distributed prematurely.
After all distributions are complete and tax returns filed, close the trust accounts and formally wind down the trust.

Personal liability: what trustees get wrong

A successor trustee is a fiduciary. This is not a ceremonial role. The most common mistakes that result in personal liability:

Distributing before taxes are cleared

Distributing trust assets before all tax returns are filed and any tax liability is confirmed can leave the trustee personally liable for unpaid taxes. The IRS can pursue the trustee directly for estate or income taxes not paid before distribution.

Missing the Medi-Cal notice

If the decedent ever received Medi-Cal benefits, California Probate Code section 215 requires the trustee to notify the Director of Health Care Services before distribution. Failing to do this and distributing assets can make the trustee personally responsible for the state's recovery claim.

Ignoring known creditors

Unlike probate, a living trust does not require a formal creditor notice period. But if the trustee knows about creditors and distributes anyway, those distributions can be voided and the trustee held liable.

Favoring one beneficiary

Every trustee duty runs to all beneficiaries equally. Selling an asset at below-market value to one beneficiary, delaying distributions to one while paying others, or sharing confidential trust information selectively can all constitute breach of fiduciary duty.

Frequently asked questions

What is the 120-day window under Probate Code section 16061.7?

After receiving the required trustee notice, beneficiaries and heirs have 120 days from service of the notice (or 60 days from receipt of a copy of the trust document, whichever is later) to file a court action contesting the trust. Once this period expires without a challenge, the trust generally cannot be contested. This window is why sending the notice correctly and promptly is so important. An improperly served notice may not start the clock.

Is a successor trustee personally liable for mistakes?

Yes. Trustees have a fiduciary duty to all beneficiaries and can be held personally liable for breach of that duty. Common liability exposures include distributing assets before paying known creditors or taxes, failing to send required notices on time, failing to file required tax returns, investing trust assets imprudently, and favoring one beneficiary over another when the trust does not authorize it. An attorney can help you identify and avoid these risks.

What is a "date of death" appraisal and why does it matter?

A date of death appraisal establishes the fair market value of real property or other hard-to-value assets as of the date the decedent died. This value becomes the beneficiary's new income tax basis (the "stepped-up basis" under IRC section 1014). Accurately documenting date of death values is critical for minimizing capital gains taxes if the beneficiary later sells the property. An incorrect or missing appraisal can cost the beneficiary significantly more in taxes.

Can the trustee be paid?

Yes. California Probate Code section 15681 entitles a trustee to reasonable compensation from the trust for services rendered. The trust document often specifies the trustee's compensation. If it does not, or if the specified amount is unreasonable, a court can set a reasonable fee. Corporate trustees typically charge a percentage of assets under administration; individual trustees often take a fixed fee or hourly rate. A trustee who also serves as a beneficiary may choose to waive compensation to avoid income tax on those amounts.

Does the trust need to go through probate?

No. That is the entire point of a living trust. Assets properly funded into the trust before the settlor's death pass directly to beneficiaries through trust administration, without court involvement. However, if the decedent owned assets outside the trust — titled in their individual name with no beneficiary designation — those assets may need to go through probate separately.

When can distributions be made to beneficiaries?

Practically, not until the trustee has confirmed all debts are paid, all tax returns are filed or accounted for, and all beneficiary notices have run their course. Distributing too early exposes the trustee to personal liability if taxes or creditor claims emerge after distribution. Most trustees make a preliminary distribution after the 120-day notice period expires and hold a reserve for taxes, then make a final distribution after tax returns are filed and cleared.

Related guides

Trust Amendment vs. RestatementHow to Fund a Living TrustCalifornia Probate CostsTrust Litigation

Need guidance as a successor trustee?

Trust administration involves real deadlines and real liability. Alex Wong can guide you through the process.

Schedule a Consultation(650) 209-0389