1. California Trust
Administration
Monica Goel, Esq.
Tredway, Lumsdaine & Doyle
8141 E. 2nd St. Downey, CA 90241
Downey, CA 90241
(562) 923-0971; mgoel@tldlaw.com
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2. Initial Contact
 Remind the client of the
important documents to
bring to the initial meeting
 The initial meeting should
take place as soon as
possible in order to meet
certain Notification
requirements.
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3. Administration is a 3 Stage Process
1. Notification and Marshalling Assets
2. Inventory & Appraisal
3. Allocation or Distribution
Let’s talk about how we implement these 3
stages……
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4. Checklists
 Have a complete and thorough client meeting
checklist for Trust Administration
 You may spend most of the first meeting consoling
and reassuring the survivor.
 This Checklist is designed mostly for internal
purposes.
 It can be expanded
upon for client
intake information.
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5. Applications For ID Numbers
 Complete the IRS Form SS-4
 This form is required to be executed by the
successor trustee prior to obtaining a
taxpayer identification number for any
subtrust(s) which are required to be funded.
 The successor Trustee will appoint the
attorney as the “Third Party Designee” in
order to obtain the new identification number
over the IRS website.
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6. Trust Review
 During or after the initial meeting, it is
necessary to review the Trust.
 Review for provisions relating to funding
formulas, powers of appointment,
distributions upon first death, etc.
 Based on the value of the Trust estate, the
surviving spouse should be made aware of
the benefits of executing a disclaimer.
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7. Trustee’s Duties
 After the initial client meeting, the successor
Trustee should be reminded of their duties
and responsibilities.
 Include any reminders necessary regarding
additional documents or information needed
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8. Notification of Trustee Under
Probate Code §16061.7
 The Trustee is required to give Notice to all
beneficiaries under the Trust and all heirs of the
decedent.
 This Notice is required to be sent within 60 days of
the decedent’s death.
 Upon the first death, the successor Trustee is only
required to provide the irrevocable terms of the Trust.
 Some attorneys send the terms of the Trust with the
Notice, although not required.
 If any possible litigation is anticipated, the Notification
should be sent via certified mail. 8
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9. Inventory of Assets
 During the initial client meeting, you should have been provided with
most of the date of death statements requested in your initial
confirmation letter. However, it is unlikely that any appraisals have
been completed.
 If an estate tax return is anticipated to be filed, a certified appraisal
should be obtained based on the market value of any real property as
of the date of death.
 Any stock holdings are valued based on the average of the high and
low stock price on the date of death.
 The Trustee may also need to obtain the value of specific items of
personal property of the decedent, such as coins, stamps, jewelry,
vehicles, farm equipment, art and antiques.
 In determining the title of the various assets, you will want to determine
if any small estate affidavits need to be prepared under Probate Code
Section 13100.
 If a probate needs to be commenced or a petition under Hegstaad
could remedy any assets not held properly in the name of the Trust.
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10. Real Property Documents
 Affidavits Re: Death of a
Trustee or Co-Trustee must be
recorded to allow new
Successor Trustee to take title
to property
 Declarations must be recorded
in the County where the
decedent owned property.
The County Assessor requires
a Preliminary Change in
Ownership Report to prevent
reassessment upon change in
Trustee.
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11. Trust Certifications
 Trust Certifications and instructions need to be provided to
any financial institutions managing accounts in the name
of the Trust
 Since the surviving spouse is most likely named as a Co-
Trustee on the accounts, the re-registration should simply
involve removing the deceased spouse’s name and
changing the taxpayer identification number.
 Not all financial institutions have the same policies and the
successor trustee may be required to complete new
account applications and establish new accounts.
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12. Estate Tax Return
 An estate tax return is required to be filed when the gross amount of
decedent’s estate exceeds the federal exemption amount.
 The current exemption amount is $3,500,000 and is based on all
assets, whether in the Trust or not.
 The value is one-half of the couple's community property and all of the
deceased's separate property, if any.
 If any prior gifts were made, obtain prior gift tax returns from the
surviving spouse to calculate the available exemption of the decedent.
 Many attorneys do not prepare the Federal Estate Tax Return and
leave the preparation to a certified public accountant who has
experience in their preparation.
 If the attorney does not prepare the Form 706, it is essential to work
closely with the CPA in order to make sure the Asset Allocation is
correctly reflected on the Form 706.
 A federal estate tax return must be filed within nine months of the date
of death. An extension can be obtained for up to six months to file the
return.
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13. Accounting
 Beneficiaries of an irrevocable Trust are entitled to an
accounting of the Trust assets at least annually
 This accounting can be waived in writing and is not
required if the sole trust beneficiary and the trustee
are the same person.
 Other people who have a future interest in the trust,
even though the interest is remote, may demand and
receive an accounting each year.
 Trust beneficiaries also have the right to request
certain information such as assets on hand, sales,
purchases, etc., from the trustee.
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14. Upon the death of the second spouse
 Represent Trustees in order to make final distribution
to ultimate beneficiaries
 The first steps in the administration upon the second
death are identical. Accordingly, the steps described
in the first previously should be repeated:
 Initial Contact
 Checklists
 Applications For ID Number if necessary
 Trustee’s Duties
 Marshall and Inventory Assets
 Accounting and Distribution
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15. Conflict of Interest
 In representing Co-
Trustees who are
also beneficiaries, it
is essential to have
an executed Conflict
of Interest Waiver
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16. Notification of Trustee Under
Probate Code §16061.7
 The Notification upon the second death
needs to state that the individuals (or
charities) are entitled to copies of the entire
trust and any amendments.
 Upon the death of the second spouse, all
terms and provisions of the Trust become
irrevocable.
 Notifications on the second death should
always be sent via certified mail, although
there is no legal requirement for the same.
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17. Inventory of Assets
 The successor trustee(s) should be advised to gather
all of the decedent’s mail.
 Provide the post office with a certified death
certificate and copies of the trustee provisions of the
Trust. In this regard, a Trust Certification should
suffice.
 The mail is essential to gathering as much
information as possible regarding the assets of the
decedent, especially if the decedent did not keep
organized files.
 Request the successor trustee to bring as much
information as possible to the initial meeting. The
determination of their relevance can be determined
by the attorney.
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18. Real Property Documents
 Affidavits Re: Death of Trustee must again be recorded in the County
where the decedent owned property
 Claim for Reassessment Exlcusions for Transfers Between Parents and
Children must be submitted separately to each County where the
decedent owned property passing to children as beneficiaries
 These forms should be sent via certified mail and request the assessor
confirm and return a copy of the same as proof of receipt
 Failure to timely submit these forms can result in reassessment of real
property and a substantial increase in annual property taxes.
 California Proposition 58 permits exclusion from reassessment of real
property passing to children limited to the principle residence of the
parent and or the first $1,000,000 of other real property.
 A similar exemption is available for transfers between grandparents
and grandchildren only when the parent of the grandchild has
predeceased the grandparent and the deceased parent was not
married at the time of death.
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19. Trust Certifications
 Trust Certifications
and instructions need
to be provided to any
financial institutions
managing accounts in
the name of the Trust
in order to allow the
new Trustee to
marshal accounts
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20. Estate Tax Return
 An estate tax return is required to be filed and
taxes paid within 9 months of the date of the
death when the gross amount of decedent’s
estate exceeds the federal exemption
amount.
 The tax must be paid within nine months of
the date of death in order to avoid any
interest accruing on the unpaid balance.
 An extension can be obtained to pay and file,
but this does not eliminate the tax being due
on or before the nine month deadline.
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21. Distribution Agreement
 Strongly advise Trustees to prepare and
circulate a Distribution Agreement
 Sets forth distribution provisions
 Often contains waiver of formal accounting
 Sets forth the value of Trust assets and
distributions to individual beneficiaries
 Contains release of liability for Trustee
 Provides for final trust termination
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22. Common Ethical Challenges in the
Trust Administration Practice
 Can you avoid allocation on death of first spouse when trust
requires mandatory sub-trust split?
 Answer: Yes. Probate Code Section 15404 allows for
modification or termination by settlor and all beneficiaries.
 Pitfalls
 Split families
 Contingent Beneficiaries
 Minor contingent beneficiaries – can they give consent or do
they need guardian ad litem to give such consent?
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23.  Can you amend a revocable trust?
 Answer – Probate Code Section 15403
modification or termination of an irrevocable
trust may be done upon consent. Requires
petition to the court.
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24. Common Ethical Mistakes that Can
Lead to Malpractice
 Actions that will trigger property tax reassessment
 Client wants to share his inheritance with spouse.
Transfer to client alone first and then do a second
transfer to include spouse to avoid reassessment
 Transfer to grandchild while parent still living will trigger
reassessment
 Siblings buying each other out their distributive share
after distribution from trust
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25. Additional Ethical Challenges that
Often Arise…….
 Representing Co-Trustees
 Do you have conflict language in your Retainer
Agreement?
 What do you do when conflict arises?
 Self-Dealing by Trustee
 Living in trust property rent-free
 Trustee who is also a beneficiary
 When filing a petition and if in doubt or even when
you’re not in doubt – always file a safe harbor petition
 Removes leverage in settlement discussions of making
a meritless claim that you violated the no clause
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