What Does a Successor Trustee Do in California? Complete Guide

You've just learned you're named as a successor trustee in someone's living trust. Maybe the trust creator has passed away, or maybe they've become incapacitated. Either way, you're now responsible for managing and distributing trust assets.

But what exactly does that mean? Here's what successor trustees need to know.

What Is a Successor Trustee?

A successor trustee is the person who takes over management of a living trust when the original trustee can no longer serve. This typically happens when the trust creator (who is usually also the initial trustee) either:

• Dies, or
• Becomes incapacitated and can no longer manage their affairs

Think of it like being named executor of a will—except with a trust, you're working outside the court system with more flexibility and fewer formalities.

When Do You Become Successor Trustee?

Upon Death

When the trust creator dies, you become successor trustee immediately. There's no court appointment needed. You simply step into the role and begin administering the trust.

Upon Incapacity

If the trust creator becomes incapacitated (due to dementia, illness, accident, etc.), you may become successor trustee while they're still alive. The trust document typically specifies:

• How incapacity is determined (usually requires one or two physician certifications)
• What powers you have during incapacity
• Whether you manage all assets or just certain ones

Your Core Responsibilities as Successor Trustee

1. Locate and Secure Trust Assets

Your first job is identifying and protecting everything in the trust:

• Real estate
• Bank accounts
• Investment accounts
• Retirement accounts (if trust is beneficiary)
• Life insurance (if trust is beneficiary)
• Vehicles
• Personal property
• Business interests

Secure physical property, notify financial institutions, and ensure nothing is lost, stolen, or wasted.

2. Notify Beneficiaries and Heirs

California law requires you to send written notice to all beneficiaries and legal heirs within 60 days of:

• The trust creator's death, OR
• The date you become trustee

This notice (required by Probate Code §16061.7) must include:

• Trust identification
• Your contact information
• Their right to request trust terms
• The 120-day contest deadline

3. Manage Trust Assets

You're responsible for prudent management of trust property:

• Pay ongoing expenses (property taxes, insurance, utilities)
• Collect income (rents, dividends, interest)
• Make prudent investment decisions
• Maintain and protect property
• Keep accurate records of everything

4. Pay Debts and Expenses

Before distributing to beneficiaries, you must pay:

• Funeral and burial expenses
• Last illness medical bills
• Outstanding debts of the deceased
• Trust administration expenses
• Taxes (income taxes, possibly estate taxes)

5. Handle Tax Obligations

You're responsible for:

• Filing the deceased's final income tax return
• Obtaining an EIN (tax ID number) for the trust
• Filing trust income tax returns (Form 1041)
• Filing estate tax returns if required (estates over $13.61 million)

6. Distribute Assets to Beneficiaries

Once debts and taxes are paid and the 120-day contest period has passed, you distribute assets according to the trust terms:

• Transfer real estate via trustee's deed
• Distribute cash and investments
• Deliver personal property
• Create any sub-trusts required (for minors, etc.)

7. Provide Accountings

Beneficiaries have a right to know what's happening with trust assets. You should:

• Keep detailed records of all transactions
• Provide accountings when requested
• Prepare a final accounting at the end of administration

8. Close the Trust

After all distributions are complete:

• Obtain receipts from beneficiaries
• File final tax returns
• Close trust bank accounts
• Retain records for at least five years

Your Legal Duties (Fiduciary Obligations)

As successor trustee, you're a "fiduciary"—meaning you must act in the beneficiaries' best interests, not your own. California law imposes specific duties:

Duty of Loyalty

Put beneficiaries' interests first. No self-dealing, no conflicts of interest, no personal profit from your position.

Duty of Impartiality

Treat all beneficiaries fairly. Don't favor one over another unless the trust specifically allows it.

Duty of Prudence

Make reasonable decisions. Invest wisely, act carefully, seek professional help when needed.

Duty to Inform

Keep beneficiaries reasonably informed about trust administration.

Duty to Account

Maintain accurate records and provide accountings when required.

Duty to Follow Trust Terms

The trust document is your roadmap. Follow its instructions.

What Successor Trustees Can (and Cannot) Do

You CAN:

• Access and manage trust accounts
• Sell trust property (usually)
• Pay bills and expenses
• Hire attorneys, accountants, and other professionals
• Make distributions according to trust terms
• Make investment decisions

You CANNOT:

• Change the trust terms
• Benefit yourself at the trust's expense
• Ignore beneficiaries' rights
• Distribute assets contrary to trust terms
• Commingle trust funds with personal funds
• Delegate your decision-making responsibilities

Do Successor Trustees Get Paid?

Yes, successor trustees are entitled to reasonable compensation for their services.

If the trust specifies compensation: Follow those terms.

If the trust is silent: California law allows "reasonable" compensation based on:

• Time spent
• Complexity of tasks
• Trustee's skill and expertise
• Results achieved
• Local custom

Family members: Often waive compensation, but they're entitled to it if they want it.

Professional trustees: Typically charge 0.5%-1.5% of trust assets annually, plus transaction fees.

Common Questions

Can I decline to serve?

Yes. Being named successor trustee doesn't obligate you to serve. You can decline (called "renouncing"), and the next named successor takes over. If no one is available, the court may need to appoint someone.

What if there are co-trustees?

If multiple successor trustees are named, you typically must act together. The trust may specify whether unanimous agreement is needed or majority rules.

Can I be removed?

Yes. Beneficiaries can petition the court to remove a trustee who breaches their duties, fails to perform, or has conflicts of interest.

What if I make a mistake?

Trustees can be personally liable for losses caused by their breach of duty. This is why many trustees hire professionals to guide them and/or obtain trustee liability insurance.

Do I need an attorney?

Not legally required, but strongly recommended for all but the simplest trusts. The cost is paid from trust assets, and professional guidance protects you from personal liability.

Getting Started: First Steps

If you've just become successor trustee:

1. Locate the trust document (and any amendments)
2. Get certified death certificates (10-15 copies)
3. Read the trust carefully to understand your duties
4. Consult an attorney before taking major actions
5. Send required notices to beneficiaries within 60 days
6. Secure and inventory assets right away
7. Open a trust bank account (you'll need an EIN from the IRS)

Need Guidance?

Being a successor trustee is a significant responsibility. The Law Offices of Rozsa Gyene guides trustees through California trust administration—helping you fulfill your duties, avoid mistakes, and protect yourself from liability.

Call (818) 291-6217 for a consultation, or visit our contact page.

Serving Glendale, Burbank, Pasadena, and all of Los Angeles County.

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This article provides general information about successor trustee duties in California. Every trust is different. Consult an attorney for guidance specific to your situation.