What Does a Successor Trustee Have to Do in California?

What does a successor trustee have to do in California, especially when the trust holds a family home in Orange County? A successor trustee is the person named in the trust to take over management when the original trustee, often a parent, dies or can't continue. You become responsible for the trust's property until it is distributed or sold.

I'm Jeanette Nelson, a REALTOR® with Jeanette Nelson Real Estate, Keller Williams Realty, serving Orange County, Huntington Beach, Costa Mesa, Fountain Valley, and surrounding areas, helping families sell a home through a life transition with a written plan. Many trustees I meet are adult children doing this for the first time, while also grieving.

This article is general information, not legal advice. A trust attorney can explain your exact duties under your family's trust.

California's Probate Code sets the basics:

• Follow the trust. Probate Code 16000 says a trustee must administer the trust according to the trust instrument.
• Loyalty. Probate Code 16002 says the trustee must administer the trust solely in the beneficiaries' interest.
• Impartiality. Probate Code 16003 says that with two or more beneficiaries, the trustee must deal with them impartially.
• No self-dealing. Probate Code 16004 says a trustee may not use trust property for their own profit or take part in a deal adverse to a beneficiary.
• Keep beneficiaries informed. Probate Code 16060 says the trustee must keep beneficiaries reasonably informed of the trust and its administration.

These duties apply even when the trustee is also a beneficiary, which is common in families.

When a trust becomes irrevocable because of a death, Probate Code 16061.7 requires the trustee to serve a notification on each beneficiary and heir within 60 days. The notice includes a warning about the deadline to contest the trust.

This notice has specific content requirements, so most trustees have their attorney prepare and send it. Keep proof of when and how it was served.

The house is often the biggest asset, and it needs care right away:

1. Secure it. Change the locks if needed, keep utilities on and check on it regularly.
2. Keep it insured. Call the insurance company, since a vacant home may need different coverage.
3. Keep paying the bills. Property taxes, the mortgage and HOA dues, if any. See do I have to pay off the mortgage when I inherit a house.
4. Get a value. A date-of-death value helps with tax and accounting questions. Ask your CPA what kind of valuation they need.
5. Decide the plan. Keep, distribute or sell, based on the trust and your family's goals.

A death is a change in ownership for property tax purposes unless an exclusion applies. The State Board of Equalization says that when ownership changes because of a death and there is no probate, the change in ownership report is due within 150 days of the date of death.

Prop 19 matters if a child plans to keep the home. The Board of Equalization says a parent-to-child transfer keeps the tax base only if the home becomes the child's principal residence, with a value limit. A trust attorney or CPA can help you decide what to file.

Often, yes. Probate Code 16226 gives a trustee the power to sell property at a public or private sale, unless the trust limits that power. Many trusts don't require every beneficiary to sign off, yet your duties of loyalty, impartiality and keeping them informed still apply.

Good habits make a sale smoother: an independent valuation, clear updates to beneficiaries, and a written plan. See can a trustee sell the house if not all the beneficiaries agree and how do I sell a house in a trust in California.

Keep a record of every dollar in and out of the trust, from the day you take over. Use a separate trust bank account, keep receipts, and save every statement.

Probate Code 16062 says that in many cases a trustee must account to beneficiaries at least once a year, when the trust ends, and when the trustee changes. Some trusts or beneficiaries waive parts of this, so ask your attorney what applies. A CPA can also handle the trust's tax filings.

If you've just stepped in as successor trustee, you don't have to sort out the house alone. I'd be glad to have a private planning conversation with your family about the home, its value and your options, working alongside your attorney. Call or text me at 714.366.8575 | DRE: 01397168, or contact me. You can also learn more on our trust sales page.