The word “trustee” shows up in legal documents all the time. For the uninitiated, it may seem abstract, like a vague fiduciary role mentioned in estate plans or financial documents. However, when someone close dies and they’ve been assigned as trustee, that person’s name is tied to legal duties, family expectations, deadlines, and decisions with real financial consequences. Regardless of the type of trust, there are several things that they should expect in the immediate aftermath of the grantor’s death.
Administering the Trust
Every trust is different, but they all have one thing in common: they grant the trustee the power and responsibility to manage the assets within. This can include everything from investment accounts and homes to personal property and business interests. Trustees are responsible for managing these assets according to the instructions laid out in the trust document. That may involve hiring appraisers, selling real estate, reviewing bank records, or working with financial institutions.
There’s no “set it and forget it” option. Trustees must make decisions actively, based on the best interests of the trust and its beneficiaries. This includes staying organized, documenting transactions, and frequently collaborating with professionals such as accountants or financial advisors to manage the trust effectively.
Distributing the Assets
Once the administrative work is underway, the trustee’s other major role kicks in: distribution. Trustees are the ones who physically or financially deliver assets to the beneficiaries. This means reading the trust carefully and executing its terms to the letter, whether that’s transferring a deed, writing a check, or setting up ongoing support payments.
In California, this often happens outside of probate court, which can save time and protect the family’s privacy. However, just because it’s not public doesn’t mean it’s informal. Trustees must follow the trust’s instructions precisely and document every distribution.
Fiduciary Responsibility
“Fiduciary duty” means the trustee must act in the best interests of the beneficiaries at all times. That includes avoiding conflicts of interest, not using trust property for personal gain, and always making decisions with care and transparency. This is not optional.
A breach of fiduciary duty can open the trustee to lawsuits, personal liability, and court intervention. If a trustee mismanages funds or fails to communicate clearly with beneficiaries, it can derail the administration of the trust entirely. If you’re in the trustee role, act like every decision could be scrutinized—because it might be.
Handling Debts and Taxes
Trustees may also need to settle outstanding debts and taxes related to the trust. This part of the job gets technical. You may need to file income tax returns for the trust, track down creditors, and resolve liabilities before distributing assets. Failing to do this correctly can delay administration or even make the trustee personally responsible for unpaid debts.
Working with tax professionals or attorneys can be a smart move here, especially when dealing with large estates or multiple beneficiaries.
Trustee vs. Executor in California Probate
It’s common for someone to die with both a will and a trust. In that case, the executor is responsible for handling probate, the court-supervised process that deals with assets outside the trust. The trustee handles everything in the trust.
Sometimes one person serves as both trustee and executor. Just remember: these are separate roles. As executor, you answer to the probate court. As a trustee, you are responsible to the beneficiaries and the terms of the trust.
The Value of Getting it Right
Serving as a trustee is both a personal obligation and a legal commitment. When it’s done right, the trust functions as it was intended. The beneficiaries receive what they’re entitled to, the process runs smoothly, and the estate avoids unnecessary court involvement. When it’s done poorly, it leads to lawsuits, damaged relationships, and legal fees.
If you’ve been named trustee and want to make sure you’re handling things correctly, the attorneys at Hedtke Law Group can help. We work with trustees across California to provide clear legal support so that nothing gets missed. Contact us to schedule a consultation.
