Table of Contents
Key Takeaways
- A successor trustee takes over when the prior trustee can no longer serve.
- The trust document typically identifies who will serve as successor trustee and explains when their management commences.
- Successor trustees generally have the same fiduciary duties as other California trustees.
- After a settlor’s death, a successor trustee may need to notify beneficiaries and heirs within 60 days.
- If the trustee withholds information, misuses trust property, or delays distributions without a valid reason, beneficiaries may have grounds to take legal action.
What Is a Successor Trustee
A successor trustee steps in to manage the trust when the current trustee can no longer serve. This might happen because of death, incapacity, resignation, or removal. Once the successor trustee agrees to take on the role, they have the authority to manage trust property and follow the trust’s instructions.
With this authority comes important responsibility. The successor trustee must follow the trust’s terms, comply with California law, protect the trust’s assets, and always put the beneficiaries’ interests first.
At The Grossman Law Firm, Attorney Scott Grossman handles trust litigation matters involving successor trustees who fail to meet these obligations.
What Does a Successor Trustee Do?
The person who creates a trust, known as the settlor, often serves as the first trustee of a revocable living trust. The trust document usually names one or more successor trustees to take over if the current trustee cannot continue.
A successor trustee may begin serving because of the first trustee’s:
- Death
- Incapacity
- Resignation
- Removal by a court
- Refusal or inability to continue serving
The trust instrument should explain how the transition occurs. For example, it may require written confirmation from physicians before a successor trustee can assume office due to the settlor’s incapacity.
A successor trustee can be an individual, such as an adult child, relative, friend, or professional fiduciary. A bank or trust company may also serve in some cases.
Once the successor trustee accepts the position, California Probate Code section 16000 requires them to administer the trust in accordance with its terms and applicable California law.
What Are the Duties of a Successor Trustee?
A successor trustee is a fiduciary. This means the trustee must place the interests of the trust and its beneficiaries ahead of their own interests.
What the trustee must do depends on the trust itself, the types of assets, and whether the person who created the trust is still living or has passed away. Here are some of the most common duties.
Review the Trust and Confirm Their Authority
The successor trustee needs to get a full copy of the trust, including any amendments, and read it carefully.
Before taking over, the trustee must ensure that the event triggering their appointment has actually occurred. This might mean getting a death certificate, a resignation letter, a court order, or a doctor’s note showing incapacity.
Identify and Protect Trust Assets
The successor trustee must determine what property belongs to the trust. This may include:
- Real estate
- Bank accounts
- Investment accounts
- Business interests
- Vehicles
- Personal property
- Other financial assets
The trustee might need to lock up a house, keep insurance in place, collect rent or other income, review account statements, and make sure nothing goes missing or is misused.
When a former trustee still holds trust property, California law generally requires that person to deliver it to the successor trustee. The former trustee remains responsible for the property until the transfer occurs.
Follow the Terms of the Trust
A successor trustee does not get to ignore the trust just because they think there is a better or easier way.
The trustee must identify the beneficiaries, determine when distributions should occur, pay appropriate trust expenses, and follow any instructions concerning the management or division of trust property.
A trustee who uses trust property for a purpose that the trust does not authorize may be violating their fiduciary duties.
Act Loyally and Without Bias
California Probate Code section 16002 requires a trustee to administer the trust solely in the beneficiaries’ interests. When a trust has multiple beneficiaries, section 16003 also requires the trustee to act impartially while considering the beneficiaries’ different interests.
If the successor trustee is also a beneficiary, they must still follow the same rules as any other trustee. They cannot give themselves special treatment.
Conduct that may raise concerns includes:
- Buying trust property for less than fair market value
- Using a trust-owned home without paying appropriate rent
- Issuing unauthorized loans to themselves or relatives
- Paying excessive trustee compensation
- Favoring one beneficiary without authority under the trust
- Using trust money to cover personal expenses
Manage and Invest Trust Property Prudently
A successor trustee may have broad powers to manage trust property, make repairs, hire professionals, pay expenses, sell assets, and make investments. California Probate Code section 16200 recognizes that trustees have the powers provided by the trust instrument and California law, but the exercise of those powers remains subject to their fiduciary duties.
Just because the trustee can do something does not mean they should.
The trustee has to manage and invest trust assets carefully. As a result, that might mean checking on current investments, avoiding unnecessary risks, keeping enough cash on hand, or getting help from a professional.
Keep Beneficiaries Reasonably Informed
A successor trustee usually has to keep beneficiaries in the loop about what is happening with the trust.
After a revocable trust becomes irrevocable upon the settlor’s death, the trustee ordinarily must send a formal notice to the beneficiaries and heirs within 60 days. That notice must include specific information, including the trustee’s contact information and a statement explaining the recipient’s right to request a true and complete copy of the trust terms.
The notice can also set a deadline to contest the trust. A person who receives the notification generally has 120 days from service of the notice, or 60 days after receiving a copy of the trust terms, whichever is later.
Trustees may also need to provide reports, accountings, or other information about trust assets, income, expenses, and distributions.
Does a Successor Trustee Need to Retitle Trust Property?
A successor trustee may need to update the title or account registration for trust-owned property to reflect the change in trustees.
For example, suppose John Smith held a trust-owned home as:
John Smith, Trustee of the John Smith Trust
After John’s death, his daughter Sally becomes the successor trustee. She may need to record or provide documents establishing that the property is now administered by:
Sally Smith, Trustee of the John Smith Trust
This does not mean Sally owns the property personally. She holds and manages it in her fiduciary capacity as trustee.
The documentation required will depend on the type of asset. Financial institutions, title companies, and county recorders may request a death certificate, a certification of trust, an affidavit of death of a trustee, or other supporting documents.
What If a Successor Trustee Breaches Their Duties?
A beneficiary may petition the California probate court when a successor trustee fails to administer the trust properly.
Warning Signs of Trustee Misconduct
Depending on the facts, the court may:
- Order the trustee to provide information
- Compel a trust accounting
- Suspend or remove the trustee
- Appoint a temporary or replacement trustee
- Reverse an improper transaction
- Require the trustee to return property
- Surcharge the trustee for financial losses
- Reduce or deny trustee compensation
Not every delay or disagreement means the trustee has acted improperly. Trust administration can take time, especially if the trust includes real estate, a business, or complex investments.
However, beneficiaries should be concerned if a successor trustee refuses to provide a copy of the trust, stops responding, cannot explain their actions, uses trust property for themselves, or delays distributions without a valid reason.
The Grossman Law Firm represents beneficiaries and heirs in California trust disputes involving these and other forms of trustee misconduct. If you suspect your trustee isn’t acting in your best interest, don’t wait. Explore 20 Ways Your Trustee May Be Breaching Their Fiduciary Duties to learn common warning signs and available actions.
FAQ
Is a successor trustee the same as an executor?
No. A successor trustee administers assets held in a trust. An executor administers a deceased person’s probate estate under a will and the supervision of the probate court.
The same person may serve in both roles, but the positions involve different property, authority, and legal procedures.
Can a successor trustee also be a beneficiary?
Yes. Many trusts name an adult child or another beneficiary as successor trustee.
However, the trustee must follow the terms of the trust and act impartially. They cannot use their position to give themselves benefits that the trust does not authorize.
Does a successor trustee automatically take over?
Not always. A successor trustee must confirm that the conditions stated in the trust have occurred and generally must accept the trusteeship.
The required steps depend on whether the prior trustee died, resigned, became incapacitated, or was removed.
Can beneficiaries remove a successor trustee?
A trust may provide a procedure for replacing a trustee without going to court. When it does not, a beneficiary may petition the probate court for removal.
California courts may remove trustees for serious breaches of trust, inability to perform their duties, substantial hostility that interferes with administration, or other grounds recognized by law.
Related Resources
- Overview of California Trust Litigation
- Trust Litigation Costs in California
- How to Pay for Trust Litigation
- Beneficiary Rights in California
- Trustee’s Duty: What is the Prudent Investor Rule?
- How to Get Your Trustee to Distribute Your Inheritance?
- Can You Remove a Trustee for Mishandling Assets?
- Can’t Afford a Probate or Trust Attorney?
How The Grossman Law Firm Can Help
Beneficiaries often have questions about a successor trustee when they cannot get information, distributions are delayed, or something seems wrong with the trust property. Our firm helps beneficiaries determine whether a trustee’s actions may be problematic and what steps to take next.
At The Grossman Law Firm, we help beneficiaries and heirs throughout California enforce their rights in probate and trust litigation.
Call The Grossman Law Firm at (888) 443-6590 or complete our Get Help Now form to take the next step toward protecting your inheritance.
If you have questions, our Intake Specialists can review your situation for free. If your case qualifies, you can schedule a free phone consultation with Attorney Scott Grossman.
Originally Published: Oct 9, 2023