Stress-Free Estate Planning Conflict-Free Trust Administration

Los Angeles Trust Administration Attorney

A trustee is accountable to the trust beneficiaries and must fulfill many important responsibilities in a timely manner. Trust beneficiaries have many rights against a trustee who does not fulfill the duties the law imposes on him or her. Trustees can be severely punished by the court if they engage in conflicts of interest, commingling of trust and personal assets, mismanagement of trust property, taking excessive trustee fees, or avoiding contact and communication with the beneficiaries. Most often, trustees get in trouble for not sending out the statutory notification by trustee advising the beneficiaries of their rights to contest the trust; or, for not providing detailed trust accounting within the time prescribed by law when presented with a written demand for accounting. In some cases, trustees can be surcharged for breaching their duties.

If you are a trustee, it is crucial that you take the proper steps in trust administration to avoid legal penalties. If you need assistance with any aspect of trust administration, reach out to the Law Offices of Maria N. Jonsson, PC as soon as possible. With more than 15 years of experience, our Los Angeles trust administration attorney is well-versed in all aspects of trust administration. We can help you navigate the process.

Please contact our office online using the online request form or call (310) 935-0706 for your initial consultation today.

The 10 Steps of the Trust Administration Process

  1. File the will with the local county Court

  2. Send the California Probate Code 16061.7 Notice to all the heirs or beneficiaries named in the decedent’s trust

  3. Compile all asset information and create an inventory

  4. Gather information of creditors to send notices

  5. Allow creditor claims in probate Court file

  6. Notify possible creditors by publishing listing in local newspaper

  7. Notify known creditors and Medi-Cal by sending notices

  8. Create a trust bank account

  9. Hire an accountant

  10. Sell specified assets after giving notice

If you seek more information or have questions about the trust administration process, do not hesitate to contact the Law Offices of Mara N. Jonsson.

What Are the Duties of a Trustee?

The trustee acts in a fiduciary capacity with regard to the beneficiaries, and his or her many duties are codified in the Probate Code as shown below. As such, a trustee is accountable not only to the beneficiaries but, most notably, to the probate court. Trustees can face penalties for miss-stepping, misusing powers, misguiding, or failing to understand and properly guide the administration of a trust.

A trustee is not only held accountable but can also be punished (surcharged) for breaching his or her duties to the beneficiaries. When a trustee is a professional (such as a CPA, a financial advisor, or an attorney), he or she is held to an even higher standard of care. It is important to understand and abide by the duties, liabilities, and responsibilities attributed to trustees.

Trustees can be severely punished by the court if they engage in:

  • Conflicts of interest
  • Commingling of trust and personal assets
  • Mismanagement of trust property
  • Taking excessive trustee fees
  • Avoiding contact and communication with the beneficiaries

Most often trustees get in trouble for not sending out the statutory notification by trustee advising the beneficiaries of their rights to contest the trust; or, for not providing detailed trust accounting within the time prescribed by law when presented with a written demand for accounting. In some cases, trustees can be surcharged for breaching their duties.

Do I Lose Control Over My Assets After I Transfer Them Into My Trust?

You do not lose control of your assets. This is because you are both the creator (Settlor), as well as the Beneficiary, and the Trustee of your trust, and you manage the trust for your own benefit. You continue to control all of your assets the same way as before: you can still buy, sell, borrow, gift, and transact in any way you wish with your assets in the same manner as when you owned them in your name alone. This is also true for buying, selling, refinancing, and leasing your real property.

What Happens if I Cannot Act as Trustee?

If you cannot act as the trustee, you will name a successor Trustee in your trust. He or she will step in your shoes to represent the trust when you are unable to act as a Trustee and will take over the trust management for your benefit since you remain the trust beneficiary during your life. The Successor Trustee can take over under three circumstances: if you voluntarily resign as Trustee, if you become incapacitated and can no longer act as Trustee, or when you pass away. After your death, the Successor Trustee will manage your trust for the benefit of the trust beneficiaries that you designated in the distributive provisions of your trust.

Trustee Duties as Outlined by the Probate Code

Below are the duties of a trustee as outlined in the California Probate Code. If you have any questions, reach out to a trust lawyer in Los Angeles at the Law Offices of Maria N. Jonsson, PC.

TRUSTEE DUTIES
Duty Probate Code Section Brief Description
Duty to administer trust §16000 You have a duty to follow the terms of the trust and the law governing the administration of trusts.
Duty of loyalty §16002 You have a duty to administer the trust solely for the benefit of the beneficiaries of the trust.
Duty to deal impartially with beneficiaries §16003 You have a duty to not favor the interests of one beneficiary over another, except to the extent that the trust provides to the contrary.
Duty to avoid conflict of interest §16004 You have a duty to avoid transactions with the trust that will benefit you personally.
Duty not to require beneficiary to relieve trustee of liability §16004.5 You cannot require a beneficiary to waive their rights as a condition of distribution.
Duty not to undertake adverse trust §16005 You may not act as trustee of any other trust that has a competing interest with this trust.
Duty to take control of and preserve trust property §16006 You must marshal trust assets and take reasonable steps to preserve them.
Duty to make trust property productive §16007 Subject to certain exceptions, you have a duty to make the trust assets profitable. The subject of trust investments is complicated, and we will discuss this area with you in detail.
Duty to keep trust property separate and identified §16009 This is one of the most important duties you have. You have a duty to keep the assets and debts of the trust separate from your own. In other words, you should not commingle funds.
Duty to enforce claims §16010 You must take reasonable actions to pursue amounts that may be owed to the trust.
Duty to defend actions §16011 You have the duty to take actions to prevent a loss to the trust, such as by defending a lawsuit.
Duty not to delegate; exception §16012 Subject to certain exceptions, you must perform actions on behalf of the trust yourself rather than having others act on behalf of the trust.
Duty with respect to co-trustees §16013 If you serve along with a co-trustee, you each have a duty to participate in the administration and prevent the other from committing a breach of the trust.
Duty to use special skills §16014 In managing the trust property, you must use at least ordinary business ability. However, if you have special skills, you will be held to a higher standard of care.
Duty to provide information to beneficiaries §§16060-16064 You have a number of duties related to providing financial and other information to beneficiaries (and in some cases, the settlor’s family members). We will discuss these duties with you in detail.
Discretionary powers to be used reasonably §§16080,

16081

Even if the trust provides that a particular action is entirely within your discretion, you have a duty to act reasonably in exercising that discretion.

How the Law Offices of Law Offices of Maria N. Jonsson, PC Can Help

As previously mentioned, we assist clients with all aspects of trust administration. Whether you are a trustee or a beneficiary, our firm can provide you with the personalized guidance and experienced counsel you need.

At the Law Offices of Maria N. Jonsson, PC, we assist clients with the following elements of trust administration:

Our goal is to achieve conflict-free trust administration. When this is not possible, whether due to an improperly drafted trust or other reasons, we remain dedicated advocates for our clients. Our seasoned Los Angeles trust administration lawyer understands the complexities of different family dynamics and can help you and your family achieve a solution that is suited to your situation.

Request a consultation with an estate planning attorney when you call (310) 935-0706 or contact us online.

  • We Work as Part of
    a Larger Team

    We work with our clients' financial planner, CPA, realtor, and insurance broker to implement a well-rounded and thorough legal plan for wealth preservation and inheritance transfer.

  • Strategic Planning &
    Attention to Detail

    We carefully look at each factor that affects the execution of an estate plan – from the perspective of minimizing and eliminating reassessment of property taxes to avoiding post-death conflicts.

  • Mediator by Training & Peacemaker by Heart

    We believe that an estate plan should leave behind not only property, but most importantly – harmony, rather than tear families apart with poorly drafted or ambiguous and confusing term