Losing a loved one is difficult enough without the added responsibility of administering a trust. Trustees may need to identify and manage assets, address debts and expenses, communicate with beneficiaries, maintain financial records, and eventually make distributions according to the terms of the trust.
Family dynamics can make those responsibilities more complicated. Questions about distributions, delays, expenses, or a trustee’s decisions can lead to disagreements, particularly when beneficiaries do not understand what is happening or why.
At Slater Cosme, PC, we help trustees navigate the administration process and understand their responsibilities under California law. Our probate and trust administration attorneys can also help identify potential problems before they develop into disputes.
From our office in Pasadena, California, we work with clients throughout Los Angeles County. If you are administering a trust or facing questions from beneficiaries, contact us to discuss your situation and legal options.
Establishing Clear Communication With Beneficiaries
Poor communication can contribute to trust disputes. When beneficiaries do not know what is happening with trust property or when distributions might occur, questions and suspicions can develop.
California law also imposes specific notification and information requirements on trustees in certain circumstances. For example, Probate Code § 16061.7 generally requires a trustee to provide specified notice when a revocable trust becomes irrevocable because of the death of one or more settlors or when there is a change of trustee of an irrevocable trust.
Beyond complying with legal requirements, practical communication can help reduce misunderstandings. Consider the following:
Send appropriate updates: Keep beneficiaries informed about significant developments in the administration when appropriate.
Document important decisions: Maintain records explaining significant actions involving trust property.
Set realistic expectations: Avoid promising a distribution date before debts, taxes, expenses, or other administration matters have been addressed.
Respond to reasonable requests: California trustees have statutory duties to provide certain information concerning the trust and its administration to beneficiaries.
Clear communication does not guarantee that beneficiaries will agree with every decision, but it can reduce confusion and create a record of how you handled the administration.
Keeping Accurate Financial Records
Trust administration carries fiduciary responsibilities, and careful financial recordkeeping is an important part of fulfilling them. California law requires trustees to keep beneficiaries reasonably informed about the trust and its administration, and trustees may have accounting obligations depending on the circumstances.
You should maintain organized records of trust assets, income, expenses, transactions, and distributions. Depending on the trust, relevant records may include:
Asset inventories: Identify the assets held by the trust and maintain appropriate valuation information.
Expense records: Document administrative expenses, taxes, professional fees, and other amounts paid from trust property.
Distribution records: Keep documentation showing distributions made to beneficiaries.
Account statements: Retain bank, investment, and other financial statements associated with trust assets.
Accurate records can make required accountings easier to prepare and help answer beneficiary questions about how trust property has been managed. They can also become important evidence if a beneficiary later challenges a trustee’s conduct.
If you are uncertain about your accounting or recordkeeping responsibilities, our probate and trust administration attorneys can review the circumstances and help you understand what California law and the trust require.
Addressing Ambiguous Trust Language Early and Handling Disputes Between Beneficiaries
Trust instruments are not always easy to interpret. Ambiguous provisions may create questions about distributions, trustee authority, beneficiary rights, or the settlor’s intended instructions.
If you encounter language that could reasonably be interpreted in different ways, obtaining legal guidance before taking significant action may help avoid a larger dispute. We can review the trust document, identify the relevant California law, and advise you about available options.
A trustee should be particularly careful about attempting to resolve ambiguity based solely on what one beneficiary believes the settlor intended. Trustees owe fiduciary duties in administering the trust and must follow the trust instrument and applicable law.
Disagreements can also arise between beneficiaries even when the trust language itself is relatively clear. Beneficiaries may have conflicting expectations about property, distributions, timing, or how the trustee should exercise discretionary authority.
When conflict develops, early intervention may prevent the dispute from escalating. Depending on the circumstances, our trust litigation attorneys can help evaluate the disagreement, communicate with the parties, explore negotiated solutions, and represent you if the matter develops into formal litigation.
Seeking Probate Court Involvement When Necessary
Trust administration generally occurs outside formal probate administration, but that does not mean the probate court has no role in trust matters.
Under California Probate Code § 17200, a trustee or beneficiary may petition the court concerning the internal affairs of a trust. Matters that can come before the court include interpreting trust provisions, determining questions involving trust property, reviewing trustee accounts, instructing a trustee, appointing or removing a trustee, and addressing alleged breaches of trust.
Court involvement may therefore become necessary when an important issue cannot be resolved privately or when judicial instructions are needed before a trustee acts.
We can help you determine whether a problem can be addressed during ordinary trust administration or whether seeking court intervention is appropriate. If litigation becomes necessary, we can prepare the required filings and represent you through the proceedings.
Speak to Probate and Trust Administration Attorneys Today
Effective trust administration involves more than distributing assets. Trustees must follow the trust instrument, comply with applicable fiduciary duties, maintain appropriate records, communicate with beneficiaries as required, and address problems before they interfere with administration.
You do not have to determine every obligation on your own. Legal guidance can be particularly valuable when the trust contains unclear provisions, beneficiaries disagree, significant assets are involved, or you are concerned that a decision could lead to a challenge.
At Slater Cosme, PC, we help trustees navigate trust administration and address disputes when they arise. From our Pasadena office, our probate and trust administration attorneys serve clients throughout Los Angeles County. Contact us today to schedule a consultation and discuss your responsibilities as trustee.
