Advisory Services to Trustees and Executors

  • Have you been named a Successor Trustee or Executor for a loved one who has recently passed on?  If so, it is important that you understand your role and the responsibilities that you have.

    California law requires you, as successor trustee or executor, to take specific legal steps in carrying out your fiduciary duties.  If the estate contains items of substantial value, such as a home, stocks and bonds, or other investments, it is worthwhile to hire an experienced administrative attorney and knowledgeable tax advisor who under stands trusts and estates.

    If legal and fiduciary procedures are not followed correctly, then title to the assets may not pass properly, creditor’s claims and legal liability may not have been resolved and tax benefits may have been lost.   You as successor trustee or executor could find yourself personally liable for damages to the beneficiaries for failing to properly perform all of your duties properly.

    Successor trustees or executors often lack the time, resources or knowledge to personally administer the trust or estate.  Most are family members who are not prepared to deal with the complexities of probate law, trust administration and investment management, while carrying out the final requests of the decedent.

    See our article: THINGS TO DO AFTER THE DEATH OF A LOVED ONE for more detail.

    If you find yourself with the role and responsibility as a successor trustee or executor, do not attempt to do this yourself.   Many trusts are poorly drafted; and poorly drafted wills and trusts can be mine fields for trustees and/or executors. 

    We are here to help you in fulfilling your fiduciary duties and can oversee the many steps needed to complete the administration of the estate.  We have included a partial list of the duties.  This will vary base on facts and circumstances of each individual estate.

    Successor Trustee / Executor Duties

    • Upon commencement, the successor trustee / executor must inform beneficiaries of his acceptance of these duties.
    • Beneficiaries and potential beneficiaries should be provided with a complete copy of the will and/or trust document, including amendments and relevant information about the assets of the estate and the particulars relating to administration.
    • All beneficiaries must be provided with an Annual Statement of the accounts of the estate.
    • Beneficiaries should be kept informed periodically as to the progress in the administration of the estate.
    • All beneficiaries should be treated with loyalty and impartiality.
    • Trustees/executors must preserve the estate assets, be certain that all assets are appropriately insured, and uphold the provisions of the will and/or trust.
      • The successor trustee/executor is liable if estate assets are lost, misplaced or destroyed because of inattention or negligence.
    • Estate property should only be invested in appropriate and prudent investments.
    • Investments must be diversified, unless specific reasons are present not to diversify.
    • Estate assets must be kept separate. The successor trustee must keep the assets of each trust separate and keep his personal assets separate from the trust assets.
    • This requires separate bank accounts, brokerage accounts, and safe deposit boxes for trust assets.
    • If assets of the bypass trust (in an A/B Trust) are not kept separate from all other assets, the trustee could be liable for subjecting these tax free assets to taxation.
    • He cannot favor himself as a beneficiary at the expense of any other remainder or potential remainder beneficiary.
    • He cannot make any distribution to anyone or any withdrawals from the trust unless specifically authorized by the trust to do so.
    • Avoid conflicts of interest and self dealing.  The successor trustee/executor cannot buy assets from the trust or sell his personal assets to the trust.
    • All required tax returns must be filed for the estate and/or trust(s), and all taxes must be paid before any distributions are allowed to beneficiaries.
    • All income must be distributed to income beneficiaries of the trust, if applicable and required.
    • Stockbrokers often know less about the prudent investor rule and fiduciary duties than does the successor trustee.
    • The successor trustee is still required to monitor the agent’s investment performance.
    • Appropriate estate expenses must be paid and apportioned properly between the income or principal sides of estate.
    • Professional advice should be sought regarding investment functions and/or delegated to investment professionals when necessary. Reasonable care should be exercised in selecting an investment agent.

    BEFORE YOU DO ANYTHING, let us review the will and/or trust and provide recommendations.  We can assist you with your responsibilities as a Trustee or Executor.  You, as trustee/ executor have a unique set of challenges regarding your role and responsibilities in fulfilling your fiduciary duties.  You must honor the requests of the decedent within the scope of current law, while dealing with the dynamics of various interested parties, named or unnamed, in a manner that relieves you of personal liability.

    See our article: THINGS TO DO AFTER THE DEATH OF A LOVED ONE for a list of things that may need to be done if you are named as a successor trustee or executor.


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