Trusts Made Easy: Estate Administration in California

What Is a Living Trust?

In California, a revocable living trust is an estate planning tool you create during your lifetime to hold title to your assets. You (the grantor or settlor) often serve as the initial trustee and beneficiary while you are alive, and you name a successor trustee to step in if you become incapacitated or pass away. Because the trust, not you individually, holds legal title to assets, the trust estate can generally be administered outside of probate, saving time and maintaining privacy. Exceptions can apply, especially if assets were not properly titled to the trust or if court relief is needed.

How Trust Administration Works After Death

When the settlor dies, the successor trustee assumes fiduciary duties to administer the trust according to its terms and California law. Common steps include:

• Providing required notices to heirs and beneficiaries (see California Probate Code § 16061.7).
• Marshaling and safeguarding trust assets.
• Obtaining a taxpayer identification number (EIN) for the trust when needed.
• Inventorying and valuing assets.
• Paying valid debts, expenses, and taxes.
• Making distributions as the trust directs.

Trustees must act with loyalty, impartiality, and reasonable care under California law. See, for example, Probate Code § 16002 (loyalty), § 16003 (impartiality), and § 16040 (standard of care).

Required Notices and Information Rights

California requires a successor trustee to serve a written notification on the settlor’s heirs and trust beneficiaries when a revocable trust becomes irrevocable at the settlor’s death—generally within 60 days. See Probate Code § 16061.7.

Service of that notification starts the time to bring a trust contest. In most cases, a contest must be filed no later than the later of: (1) 120 days after service of the trustee’s notification, or (2) 60 days after the trustee provides a copy of the trust terms upon request. See Probate Code § 16061.8.

Beneficiaries are entitled to reasonably requested information about the trust and, unless validly waived, periodic accountings. See Probate Code §§ 16060–16063 and § 16062.

Accountings and Transparency

Formal trust accountings must follow statutory content requirements, such as statements of receipts and disbursements, assets on hand, liabilities, and trustee compensation. See Probate Code § 16063. Accountings are typically required at least annually, on termination of the trust, and upon a change of trustee, unless validly waived or excepted by statute (including while the settlor is alive and has capacity for a revocable trust). See § 16062.

Avoiding Probate With Proper Funding

A trust only governs assets properly titled in the name of the trust or payable to the trust by beneficiary designation. Properly funding your trust—retitling real property and financial accounts and coordinating retirement accounts and life insurance—helps keep administration outside probate. Some assets (for example, retirement accounts) may be better left with individual beneficiary designations for tax reasons; coordination with counsel and tax advisors is important.

Duties of a California Trustee

Trustees in California owe fiduciary duties that include the duty of loyalty, impartiality among beneficiaries, prudent administration, segregation of trust property, and the duty to keep beneficiaries reasonably informed. See, e.g., Probate Code § 16002, § 16003, § 16040, and §§ 16060–16063. Trustees should keep detailed records, maintain a separate trust bank account, and document decisions. When uncertain, a trustee can seek beneficiary consent or petition the court for instructions.

Trust Contests and Deadlines

California provides a limited timeframe to bring a trust contest after the trustee’s statutory notice is served—generally the later of 120 days from notice service or 60 days after the trustee provides a copy of the trust terms. See Probate Code § 16061.8. No-contest clauses and other procedural rules may affect rights and remedies, so prompt legal advice is recommended upon receiving notice.

Taxes in Trust Administration

Trust administration often involves filing the decedent’s final income tax return, fiduciary income tax returns for the trust, and addressing any estate tax issues if applicable. Trustees typically obtain an EIN for the trust after death, consider allocation of income and deductions between the decedent’s final return and the trust, and observe California and federal filing obligations. Tax elections and distribution timing can affect overall tax efficiency; coordinate with qualified tax professionals.

Real Property: Affidavits, Deeds, and the Parent–Child Exclusion

Transferring California real estate held in trust usually involves recording appropriate affidavits and deeds. Property tax reassessment rules are complex. After Proposition 19, only limited parent–child (and certain family farm) exclusions from reassessment may be available, subject to conditions such as a primary residence requirement and value caps. See the California State Board of Equalization Proposition 19 Fact Sheet. Local assessor procedures and filing deadlines are strict—evaluate eligibility and file timely to preserve potential benefits.

Common Pitfalls to Avoid

• Not funding the trust or updating titles after life changes
• Missing required notices or accounting obligations
• Commingling trust and personal funds
• Making distributions before identifying and paying valid debts, taxes, and expenses
• Overlooking property tax and transfer documentation for California real estate
• Ignoring no-contest clauses or deadlines after service of statutory notices

Practical Tips for Trustees

Quick Checklist for Successor Trustees

When Court Involvement May Be Needed

Even though trusts aim to avoid probate, court petitions may be necessary to interpret ambiguous provisions, approve accountings, remove or appoint trustees, modify or terminate a trust, or confirm title to assets. California’s Probate Code provides procedures to resolve these issues when needed.

FAQ

Do all assets in a living trust avoid probate in California?

Generally yes, but only if they are properly titled to the trust or pass to the trust by beneficiary designation. Assets left outside the trust may require probate or other proceedings.

How long does trust administration take?

Simple administrations can finish in several months; more complex estates involving real property, tax issues, or disputes can take a year or longer.

Are trustees paid?

Yes. Trustees are typically entitled to reasonable compensation, which must be disclosed in accountings and may be subject to objection.

Can beneficiaries get copies of the trust?

Yes. After the settlor’s death when a revocable trust becomes irrevocable, beneficiaries and heirs are entitled to a copy upon request under California law.

How Our Firm Can Help

We guide clients through every stage: creating and funding living trusts, coordinating beneficiary designations, advising successor trustees, preparing notices and accountings, addressing tax and real property filings, and resolving disputes efficiently. Whether you are planning ahead or administering a loved one’s trust, we aim to make the process clear, compliant, and as streamlined as possible. Have questions? Contact us.

Disclaimer

This blog is for general informational purposes only and is not legal or tax advice. Reading it does not create an attorney-client relationship. It reflects California law as of August 19, 2025, and may not account for later changes. Laws apply differently based on specific facts—consult a qualified California attorney about your situation.