When a loved one passes away, families are often left trying to figure out what steps they need to take next. If your family member had a revocable living trust, the process for handling their affairs will look different than if they only had a will. In many cases, a properly funded trust allows the family to avoid probate court, but there is still an important administration process that needs to take place. While every situation is different, here are five important considerations to focus on after a family member passes away in California with a Living Trust.
1. Obtain death certificates and gather the trust documents
One of the first steps is to obtain several certified copies of the death certificate, since banks, financial institutions, and other organizations will often require them. You’ll also want to locate the trust documents and determine who is named as the successor trustee. The successor trustee is the person who has the legal authority to step in and begin managing and administering the trust after the trust creator passes away. This person will be responsible for gathering information about the estate, communicating with beneficiaries, and carrying out the terms of the trust.
2. Gather a list of assets and determine ownership.
Second, it’s important to identify the assets that existed at the time of death. This includes determining which assets are titled in the name of the trust and which assets may still be titled in the decedent’s individual name. If assets are properly titled in the name of the trust, they can generally be administered by the successor trustee without going through probate court. However, if assets were left outside of the trust, additional steps may be required to transfer those assets.
3. Gather a list of debts and creditors.
In addition to identifying assets, the successor trustee should also determine whether there are any debts or outstanding creditors. This can include a mortgage, credit cards, medical bills, and so forth. One helpful way to identify potential creditors is by running a credit report for the deceased individual, which may reveal accounts that were not immediately obvious. In many cases it is sufficient to provide informal notice by contacting known creditors directly and providing a copy of the death certificate. If there is a mortgage, you want to prioritize notifying them of the death and staying in contact with them regarding that debt.
4. Consider working with a trust attorney.
Although you are not required to hire an attorney to administer a trust, many trustees find that working with a trust administration attorney can be extremely helpful. A trust attorney can guide the trustee through the administration process, help ensure that legal requirements are followed, and assist with things like notices, asset transfers, and distributions. Having guidance can help the trustee feel confident that they are fulfilling their responsibilities properly.
5. Notify beneficiaries and begin the trust administration process.
In California, the successor trustee is required to send a notification to all trust beneficiaries and all heirs under Probate Code Section 16061.7. This probate code section lists the requirements for what most be included in that notification. It also starts the clock running on a beneficiary’s or heir’s deadline to contest the Trust.
While this is a non-exhaustive list of what is required in a Trust administration, it is a good overview of what to consider when getting started. The trustee has a fiduciary duty to act in the best interests of the beneficiaries and to follow the instructions outlined in the trust document. While the process may feel overwhelming at first, taking these steps in an organized way can help ensure that the trust is administered properly and that your loved one’s wishes are carried out.
If you would like to learn more about trust administration for your specific situation, please contact us at 424-242-5021 or at info@altalegacylaw.com for a consultation.
Nothing in this article should be construed as legal advice. For specific guidance regarding your situation, please contact an attorney.