Trust and estate administration attorneys

California trust and estate administration encompasses the legal procedures for managing and distributing an individual’s assets following their demise. This process typically involves a court-monitored probate or a non-probate administration, such as a trust administration.

In California, when an individual passes away with a will, their estate usually undergoes probate. During this probate process, a court supervises the estate’s administration, which includes settling debts and taxes, identifying heirs and beneficiaries, and distributing assets per the will’s stipulations.

Alternatively, if the deceased established a trust, the trust administration process may be employed as an alternative to probate. During trust administration, the appointed trustee oversees the assets within the trust and ensures their distribution to beneficiaries, precise terms specified in the trust document.

Regardless of whether the estate follows probate or trust administration, California law imposes specific fiduciary obligations on the executor or trustee. These duties include acting in good faith and in the best interests of the beneficiaries, ensuring the proper administration of the estate or trust, and complying with all legal requirements, such as filing tax returns and settling any outstanding tax obligations.

Turn to OC Trial Group for quality trust and estate administration. Fill out our online contact form today to schedule your free initial consultation with our trust & estate administration lawyers in Orange County.

Why Choose OC Trial Group To Handle Your Trust and Administration Case?

Our team of highly skilled attorneys possesses a unique blend of expertise, dedication, and local knowledge that sets us apart in the field of trust and estate administration in Orange County. With years of collective experience in navigating the intricate legal landscape, we understand the nuances and intricacies that come with administering trusts and estates, specifically in our vibrant community. We’re dedicated to customizing our services to match our clients’ unique requirements and goals, making sure we pay close attention to every detail. Our extensive network within Orange County, spanning financial institutions, real estate professionals, and other key stakeholders, further enhances our ability to deliver comprehensive and effective representation. When you choose us to handle your trust and estate administration case, rest assured that our attorneys possess the expertise, experience, and local connections needed to secure the best outcome for you and your family.

What Is Trust Administration in California?

When someone passes away in California with their assets held in a trust, the transition of their assets and properties into an estate for distribution follows a distinct legal process known as trust administration. Unlike probate, which is commonly associated with other jurisdictions, trust administration in California involves a systematic review and execution of the trust’s provisions.

In California, the trust administration process encompasses crucial tasks such as validating the trust document, appointing a successor trustee, identifying and assessing assets, settling debts and tax obligations, and ultimately distributing the estate in accordance with the decedent’s wishes or California law.

Given the potential for complexities and delays in the trust administration process, it is advisable to seek guidance from a knowledgeable trust administration attorney before initiating the process. This legal professional can provide valuable insights, navigate potential challenges, and ensure a thorough and efficient administration of the trust in adherence to California regulations.

What Powers Does a Trustee Have During Trust Administration in California?

In the capacity of a trustee in California, the initial step involves a meticulous examination of the trust instrument to determine the extent of powers bestowed upon the trustee. Even if the trust instrument imposes limitations on these powers, it is essential to recognize that the courts possess the authority to lift such restrictions. The exercise of powers must align with the prudent investor and prudent person standards, as detailed above, all while safeguarding the best interests of the beneficiaries.

It is crucial to note that the mere grant of a power does not automatically mandate its exercise. When deciding whether to wield a particular power, the trustee’s paramount consideration should always be the well-being of the beneficiary.

Under the California Probate Code, the trustee’s powers encompass various key aspects:

  • The power to collect and hold property.
  • The power to continue a business.
  • The power to invest in “any kind of property.”
  • The power to buy or sell property.
  • The power to pledge trust property for a loan.
  • The power to subdivide and develop land.

Additionally, California law extends further powers as may be necessary for the trustee to fulfill duties effectively. For comprehensive guidance on navigating and utilizing trustee powers in California, consulting with an experienced legal team is recommended. The dedicated professionals are committed to ensuring the trustee’s actions align with legal standards and serve the best interests of the beneficiaries.

What are Common Mistakes Made by California Trustees?

When fulfilling the pivotal role of a trustee in California, it’s crucial to be aware of common pitfalls that can arise during trust administration. Whether you are a trustee who needs advice on complying with their duties or a beneficiary seeking to redress a trustee’s failure to comply with their duties, OC Trial Group’s experienced trust administration attorneys are here to assist you in avoiding the common pitfalls encountered during trust administration in California. Some of the common pitfalls made by California trustees during the administration of a trustee include:

Failing to Keep Beneficiaries Informed

One prevalent mistake trustees make is insufficiently informing trust beneficiaries about trust administration matters. Neglecting the duty to keep beneficiaries reasonably informed can lead to complications. Trustees must communicate essential information to enable beneficiaries to enforce their rights under the trust or address any breach of trust. This includes providing complete and accurate information when requested and planning for an annual report, even if not explicitly asked for.

However, a trustee does not have to comply with a beneficiary’s request to keep them informed in any of the following situations:

  • Trust instrument waives the duty to report or account (court intervention possible in case of a material breach).
  • During the time the trust is revocable.
  • When a beneficiary has waived the right to an account or report and hasn’t revoked the waiver.
  • In cases where the beneficiary and the trustee are the same person.

Beneficiaries requesting information should provide sufficient advance notice, and if copies of trust records are desired, the cost of copying may be charged to the trust.

Insufficient Trust Bookkeeping

A common oversight of a trustee is underestimating the importance of meticulous trust bookkeeping. The trustee’s internal financial records, whether as basic as a checkbook or as intricate as a double-entry bookkeeping system, are integral. Beyond mere bookkeeping, trustees must actively track both principal and income, often managed through a fiduciary account.

Not Saving Records

When it comes to the records of the deceased, the surviving spouse often grapples with the question: “How long do I have to keep checkbooks, passbooks, tax returns, and other important papers?” The answer depends on whether the records pertain to the period before or after death. Typically, records linked to the period before death should be retained for five years, especially if the assets underwent an adjustment to their income tax basis upon the deceased spouse’s death. However, for assets without a new income tax basis, these records should be kept indefinitely, as they will be essential for income tax reporting purposes upon the eventual sale or transfer of assets.

For records concerning the post-death period, i.e., the administrative trust, prudent practice dictates retaining them for the term of the trust plus an additional five years. Sub-trust records should adhere to a similar retention period. In certain instances, it makes sense to consider indefinite retention, particularly when sub-trusts involve contingent, minor, or unborn beneficiaries, as the statute of limitations for potential lawsuits may extend over many years. Additionally, records related to the valuation of assets in the survivor’s estate and those justifying decisions made in funding trusts should be retained until after the passing of the surviving spouse.

Regardless of other considerations, trustees might find it beneficial to preserve skeletal records, such as copies of the federal estate tax return, appraisals of illiquid trust property, fiduciary accounts, and income tax returns. With the advancement of document storage technology, including options like hard drives, cloud storage, and USB flash drives, trustees can efficiently store all or part of the trust books and records, addressing concerns about cost and storage space.

When deciding to discard trust records, a proactive approach involves offering them first to one or more of the distributees of the assets. This action not only demonstrates consideration but may also serve as a defense if trustees face criticism in the future for not retaining certain records.

What Does The Probate Process Look Like in California?

When someone passes away in California with their assets not held in a trust or some other form of non-probate asset, the transition of their assets and properties into an estate for distribution necessitates a legal process known as probate. In California, probate courts meticulously oversee this process, ensuring the proper distribution of estates and addressing disputes related to will and estate plan validity, the appointment of a personal representative, property identification and valuation, debt settlement, tax obligations, and property distribution in accordance with the deceased’s wishes or California law. Given the potential complexities and delays, seeking guidance from a probate lawyer before initiating the estate opening is highly advisable.

Estimate your probate costs quickly and easily with our Probate Calculator.

Different Types of Probate

There are several types of probate procedures available under California law, including general probate, summary probate, spousal property petition, affidavit procedure, small estate administration, and a Heggstad petition. 

General Probate

General probate is the conventional process involving court supervision and is typically applicable when the estate’s value surpasses a specified threshold. This method involves court oversight, formal administration procedures, and a comprehensive examination of the deceased person’s assets and debts.

Summary Probate

Streamlined for estates with limited assets, summary probate offers an expedited process with simplified documentation requirements. This option is particularly beneficial for estates valued below a specified threshold, providing a quicker resolution.

Spousal Property Petition

Reserved for cases where the surviving spouse is the sole heir, the spousal property petition facilitates the transfer of community property without undergoing the traditional probate process. It offers a simplified procedure tailored to the unique circumstances of surviving spouses.

Affidavit Procedure

Designed for estates with real property valued under a specific threshold, the affidavit procedure streamlines the probate process by allowing the transfer of real property through a simplified affidavit, avoiding the need for formal probate proceedings.

Small Estate Administration

Tailored for estates with a gross value below a specified limit, small estate administration offers a faster resolution with reduced court involvement and simplified documentation requirements, making it an efficient option for qualifying estates.

Heggstad Petition

The Heggstad petition comes into play when a decedent’s property wasn’t properly funded into a trust but was intended to be. This approach seeks court approval to retroactively include assets in the trust, providing a strategic solution to avoid formal probate.

Understanding the intricacies of each probate type is crucial for effective estate administration. Our experienced team at OC Trial Group is dedicated to guiding you through the complexities of California probate, ensuring you choose the most suitable approach for your specific circumstances.

What Is a Personal Representative in California Probate Law?

In California, a personal representative, commonly referred to as an executor or administrator, is an individual appointed by the court to oversee the administration of a deceased person’s estate. The personal representative has the responsibility of managing and distributing the decedent’s assets, settling debts, and ensuring that the terms of the will or the intestate succession laws are followed. This role is crucial for navigating the probate process efficiently and in accordance with legal requirements. If you have further questions or need assistance with California Probate Law, our experienced team at OC Trial Group is here to provide guidance tailored to your specific situation.

What Duties Does a Personal Representative Have During Estate Administration in California?

In the realm of estate administration, it is imperative that a personal representative appointed by the court adhere to legal obligations that demand careful and diligent execution of their duties under the California Probate Code. This involves the management and preservation of estate assets for the benefit of the beneficiaries. California law mandates the administration of the estate in a timely and efficient manner, with a focus on three primary objectives: the collection and management of assets, the payment of debts and taxes, and the subsequent distribution of the remaining assets.

As a personal representative, it is crucial to seek out an experienced probate lawyer to represent you before undertaking specific actions. Certain activities, such as carrying on the decedent’s business, performing contracts, making binding contracts on the estate, borrowing money, selling estate property, and other significant transactions, require prior approval.

The following actions should not be initiated without consulting your attorney first:

  • Carrying on the decedent’s business.
  • Performing the decedent’s contracts.
  • Making any contracts binding on the estate.
  • Borrowing money; giving notes; or executing a mortgage, deed of trust, or other lien agreement on estate property.
  • Selling any property of the estate.
  • Giving away any estate property.
  • Leasing estate property.
  • Distributing property of the estate to a legatee or devisee.
  • Depositing estate funds in your personal account.
  • Selling stocks or bonds, exercising subscription rights, or buying stocks or bonds for the estate.
  • Acting without the authority of your representative or administrator.
  • Paying or compromising any debts or claims against the estate, except under the notations provided below.

Claims arising before the date of death and funeral expenses necessitate the presentation of a verified claim to you. However, expenses of estate administration arising after the date of death do not require the same process. Payment of claims and administration expenses should be approached cautiously, with consideration given to the estate’s ability to cover all financial obligations. 

OC Trial Group, APC are top-rated attorneys based in Orange County, with offices in Newport Beach and San Juan Capistrano. We also serve clients throughout California, including Westminster, Tustin, Irvine, Buena Park, Laguna Hills, Fullerton, Newport Beach, Fountain Valley, San Juan Capistrano, Costa Mesa, Garden Grove, Stanton, Cypress, Anaheim, Mission Viejo, Laguna Niguel, Brea, and Dana Point.