Seven Tips for Successor Trustees in Post Death Trust Administration by Mark W. Bidwell, Esq.

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Trusts nominate a successor trustee to properly administer and close the estate. Mark W. Bidwell, Esq. provides tip sheet to keep the successor trustee out of trouble and out of probate court at website

Mark W. Bidwell, Attorney at Law

Seven tips to Successor Trustees to avoid trouble and probate court.

Seven tips by Mark W. Bidwell, Esq., at, to keep a Successor Trustee out of trouble and out of probate court. Post trust death administration requires the Successor Trustee to provide notice, file income tax returns, protect the property tax base, transfer property, account, communicate and close.

First, California Probate Code Section 16061.7 requires the Successor Trustee to provide written notice to beneficiaries of the trust and heirs the decedent. This notice must be provided within 60 days from date of death. A trustee who fails to serve the notification as required by Section 16061.7 on a beneficiary is responsible for all damages, attorney's fees, and costs caused by the failure.

The second step is to obtain a Federal Tax Identification Number by completing Form SS-4 to file income tax returns. After date of death the decedent’ estate becomes a separate taxable entity. State and Federal income tax returns must be filed until all assets of the estate are distributed. If the Successor Trustee distributes all the assets of the trust and a tax liability remains, the Successor Trustee may have to personally pay the tax due.

The third step is to file a Preliminary Change of Ownership Report form with the County Recorder. The Successor Trustee avoids personal liability for property tax increases by putting the County on notice of change of ownership in real property due to the death of the decedent. The property tax base is adjusted to market value at date of death.

The fourth step, if needed, is for the Successor Trustee to file a “Parent to Child Exclusion Form” with the County Recorder. Death results in a change in ownership which changes the base for property tax. The new base is the market value at date of death. California excludes the first $1 million plus the principal residence of the parents in parent-child transfers. The exclusion also applies to grandparent to grandchild transfers.

To obtain the exclusion the ‘Claim for Reassessment Exclusion for Transfer between Parent and Child’ form must be filed within three years after the date of the transfer to obtain this exclusion. Best administration practices require filing as soon as the Trustee knows the property will be transferred to children or grandchildren of the decedent.

The fifth step is for the Successor Trustee to take control of the real property. To take control the Successor Trustee must file an affidavit of death of trustee in the county where the real estate is located. The affidavit provides the Successor Trustee authority to either sell or transfer the real property.

The sixth step is an ongoing duty to keep an account and periodically provide financial reports to the beneficiaries of the trust. An accounting is needed from the date of death to the final distribution of assets of the trust. An accounting keeps beneficiaries informed and provides transparency in the administration of the trust. An accounting also provides information needed for filing federal and state tax returns for the trust.

The seventh step is to administer the trust in a timely manner and maintain ongoing communication with the beneficiaries. Procrastination is the successor trustee’s biggest problem. Lack of communication is the next. Beneficiaries become more anxious and hostile as time goes on. The competency and integrity of the successor trustee is questioned. A successor trustee who does little or nothing and who fails to communicate will find himself or herself named in a lawsuit in probate court.

Mark W. Bidwell is a licensed California attorney. His office is at 18831 Von Karman, Suite 270, Irvine, California 92612. Mr. Bidwell markets through websites, primarily Deed and Record and Best way to contact is at 949-474-0961 or at Mark(at)DeedAndRecord(dot)com.

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