When an individual or a married couple creates a revocable living trust in California, each person who created the trust is called “settlor.” The settlor, or settlors in the case of a married couple, will usually act as current trustee(s). In their trust, they will designate a non-settlor successor trustee to take over management of the trust after their death.
This article summarizes the key responsibilities and duties of the non-settlor trustee in administering the trust for a relatively simple, non-taxable estate. Please keep in mind that no two estates are alike and this article, just like everything else on this website, does not constitute legal advice.
Upon the death of the settlor, the non-settlor trustee takes legal control over the trust assets and administers the trust according to its terms. Their core responsibilities include:
- Working with the estate attorney to probate any assets not transferred to the trust. This may require filing paperwork with the county probate court within 30 days of the settlor’s death.
- Lodging the decedent’s will.
- Putting creditors and beneficiaries on notice that the settlor has died and an administration is taking place.
- Managing and protecting trust assets until they are distributed. This includes tasks like collecting income, paying expenses, arranging property maintenance, and investing conservatively.
- Distributing trust assets to beneficiaries. For a revocable living trust, this usually involves relatively simple outright distributions to named beneficiaries after debts and taxes are paid.
- Filing any required tax returns for the trust if it generates taxable income. No estate tax return is needed for a non-taxable estate.
- Keeping thorough records and providing accountings to beneficiaries on trust administration and distributions.
- Acting as an impartial fiduciary and avoiding any conflicts of interest in administering the trust.
A non-settlor trustee takes on important legal and financial responsibilities in wrapping up a revocable trust after the settlor’s death. They must follow all applicable laws and trust terms until assets are finally distributed to heirs. For a simpler trust, this role may be fairly straightforward but still requires care and attention to detail. What exactly the successor trustee will need to do will vary from one estate to another, but one thing I can tell you for sure – the better you prepare, the easier, faster, and cheaper the successor trustee’s job will be!
Set up a free consultation today