Successor Trustee

Successor Trustee – We have had numerous calls by Successor Trustees after a parent/client dies.

The Successor Trustee (usually the child) receives a letter from us with a list of documents needed for the initial Trust Administration consultation. I charge $350 for this consultation. It is at this time we get questions from the child about the consultation and why it is necessary. The typical question – “Didn’t the Trust die when my mom died? All I need to do is distribute the estate, right?”

Well, not exactly. Ultimately, the Successor Trustee will distribute the estate but there are other requirements necessary which are discussed at the consultation. “Like what?”, is a typical response.

Like the following:
1. Obtaining a new tax I.D. number for the Trust;

2. Statutory Notices to beneficiaries as required by California law;

3. Obtaining the new Certification of Trust which certifies the Successor Trustee as the newTrustee;

4. Filing the Will required by California law;

5. Contacting Social Security and returning any check(s) as required by federal law;

6. Confirming beneficiaries in retirement plans (IRAs, Roths, 401ks, etc.), life insurance and annuities and establishing payouts to reduce or eliminate taxes. IRA distributions must be elected by various deadlines or default provisions prevail;

7. Establishing values to asset accounts and especially real property. The death of a parent or spouse allows a step-up in cost basis to fair market value to eliminate capital gains tax. We need to establish this with certified appraisals on real property and business interests. (LLCs,S-Corps, Partnerships);

8.Timeshare transfer documents must be arranged;

9. Re-coupment of interests held in retirement complexes. (Ex. La Costa Glen) Retained interests are usually owned by the Trust on the death of the owner;

10. Distribution of personally items such as jewelry, paintings, automobiles, guns, furniture and furnishings among the siblings;

11. Arrangement of information for tax returns and any un-paid taxes; and

12. Obtaining Waivers from beneficiaries to protect the Successor Trustee.

These are some of the responsibilities of a Successor Trustee. So, for those of you who are designated to act as Trustee of the Family Trust, the foregoing gives you an idea of what is undertaken in that initial Trust Administration consultation. Now, do you feel that the Trust dies with the decedent? Not by a long shot – the work of the Successor Trustee just begins.

The Stephens Law Group offers in-house workshops for Successor Trustees which includes a Check List of Trustee Responsibilities and a brochure entitled “What To Do On the Death of a Spouse or Parent”.

Please call if you are a Successor Trustee and would like to attend a workshop. You can reach us at 858-792-0909.