What Are a Trustee’s Duties in California?

Understanding the Role of a Trustee

A trustee is responsible for managing trust assets and carrying out the terms of the trust.

After the creator of a revocable living trust dies, the successor trustee generally assumes responsibility for trust administration.

For families in San Jose, Santa Clara County, and throughout Silicon Valley, serving as a trustee can involve significant legal, financial, and practical responsibilities.

Trustees are required to act in the best interests of the beneficiaries and administer the trust according to California law.

For a broader overview of the process, see Trust Administration After Death.

The Duty to Follow the Trust

One of a trustee’s primary responsibilities is to follow the instructions contained in the trust document.

This may include:

• identifying beneficiaries;

• managing trust assets;

• paying debts and expenses; and

• distributing property according to the terms of the trust.

Trustees do not have unlimited discretion and generally must administer the trust according to its written terms.

The Duty of Loyalty

California trustees owe fiduciary duties to the trust beneficiaries.

This means trustees must act in the best interests of the beneficiaries and avoid conflicts of interest whenever possible.

A trustee generally may not:

• use trust assets for personal benefit;

• favor one beneficiary over another without authority; or

• generally engage in self-dealing transactions.

Trustees are expected to place the interests of the beneficiaries above their own personal interests.

The Duty to Protect Trust Assets

Trustees are responsible for preserving and protecting trust property.

Depending on the assets involved, this may include:

• maintaining real estate;

• safeguarding financial accounts;

• collecting income;

• managing investments; and

• ensuring trust property remains properly insured.

Trustees are expected to exercise reasonable care when managing trust assets.

For example, trustees frequently inherit responsibility for homes that were transferred into a living trust during the trust creator’s lifetime. To learn more, see Can I Transfer My Home Into a Revocable Living Trust?

The Duty to Maintain Records

Trustees should maintain accurate records throughout the administration process.

Important records often include:

• bank statements;

• receipts;

• tax filings;

• property records; and

• documentation of distributions.

Accurate recordkeeping helps demonstrate that trust assets have been managed appropriately and can be invaluable if questions arise later.

The Duty to Pay Valid Debts and Expenses

Before distributing assets, trustees often must address certain financial obligations.

Depending on the circumstances, this may include:

• funeral expenses;

• taxes;

• creditor claims; and

• administration expenses.

The specific obligations depend upon the nature of the trust assets and the circumstances of administration.

While trust administration is generally different from probate, understanding the probate process can help trustees appreciate many of the issues that arise after death. For more information, see How Probate Works in California.

The Duty to Distribute Trust Assets

Once administration has progressed sufficiently, trustees generally distribute trust assets according to the trust terms.

The timing of distributions depends on factors such as:

• the complexity of the estate;

• tax considerations;

• creditor issues; and

• the instructions contained in the trust.

Trustees should avoid unnecessary delays while ensuring administration is completed properly.

What Happens If a Trustee Fails to Perform These Duties?

Beneficiaries may have legal remedies when a trustee fails to fulfill fiduciary obligations.

Potential issues may include:

• failure to communicate;

• unreasonable delays;

• improper distributions;

• self-dealing; or

• mismanagement of trust assets.

The available remedies depend on the specific facts involved.

For additional information, see What Happens If a Trustee Refuses to Act?

Trust Administration Often Involves More Than Expected

Many individuals agree to serve as trustee without fully understanding the responsibilities involved.

Trust administration frequently includes legal, financial, tax, and family-related issues that require careful attention.

In many cases, trustees discover that assets were never properly transferred into the trust during the trust creator’s lifetime. To learn more, see Why Funding Your Trust Is Just as Important as Signing It.

When title problems arise after death, additional court proceedings may sometimes be necessary. For more information, see Heggstad Petitions Explained: Fixing Trust Funding Problems in California

Understanding what assets belong to the trust and what assets may avoid probate altogether is also an important part of administration. See What Assets Avoid Probate in California?

Understanding Trustee Responsibilities

Serving as a trustee can be a significant responsibility.

Whether a trust was created to avoid probate, manage assets for children, or provide a smooth transition after death, trustees play a critical role in carrying out the estate plan.

For individuals considering their own estate planning options, see Do I Need a Trust or a Will in California?

Understanding a trustee’s duties can help both trustees and beneficiaries navigate the administration process more effectively and reduce the likelihood of future disputes.

Trustees and beneficiaries may also find these articles helpful:

• Trust Administration After Death

• What Happens If a Trustee Refuses to Act?

• Why Funding Your Trust Is Just as Important as Signing It

• Heggstad Petitions Explained: Fixing Trust Funding Problems in California

• How Probate Works in California

• What Assets Avoid Probate in California?

About the Author

Adam T. Evan is a California estate planning attorney serving individuals and families throughout San Jose, Santa Clara County, and Silicon Valley. His practice focuses on estate planning, probate, trust administration, and guardianships. He helps clients create practical estate plans, guide families through probate proceedings, and assist trustees with trust administration after the death of a loved one.

To schedule a consultation, contact the Law Office of Adam T. Evan at (408) 515-9005.