A New Trustee's Checklist for Your First 90 Days in LA Managing the Essentials

Becoming a trustee in California, especially in Los Angeles, can feel overwhelming. Whether you’re stepping into this role after the passing of a loved one or due to their incapacity, understanding your responsibilities is crucial. This guide will provide a clear timeline and checklist for your first 90 days as a trustee, covering essential tasks like notifying beneficiaries, securing property, and managing finances.

Day 1-10: Initial Steps and Notifications

Notify Beneficiaries

Your first step as a trustee is to notify all beneficiaries of the trust. This is a legal requirement in California. You must send a written notice to each beneficiary, informing them of their interest in the trust.

• Checklist:

- Draft and send notices to all beneficiaries.

- Include details about the trust and your role as trustee.

Secure Property

If the trust includes real estate, securing the property is vital. This means ensuring that the property is safe and properly insured.

• Checklist:

- Change locks if necessary.

- Review existing insurance policies and update them if needed.

Inventory Trust Assets

Creating an inventory of trust assets is essential for transparency and future management. This includes real estate, bank accounts, investments, and personal property.

• Checklist:

- List all assets and their estimated values.

- Document any debts or liabilities associated with the trust.

Day 11-30: Financial Management and Accounting

Basic Accounting Setup

Establishing a basic accounting system is crucial for managing trust finances. This will help you track income, expenses, and distributions.

• Checklist:

- Open a separate bank account for trust funds to avoid commingling.

- Use accounting software or spreadsheets to track transactions.

Understand Trustee Duties

Familiarize yourself with your trustee duties in California. This includes managing trust assets prudently and acting in the best interest of the beneficiaries.

• Checklist:

- Review California trustee duties and responsibilities.

- Consider consulting with a trust attorney for guidance.

Red Flag: Commingling Funds

Warning: Avoid commingling trust funds with personal funds. This can lead to legal issues and complicate accounting.

Day 31-60: Dealing with Siblings and Co-Trustees

Communication with Co-Trustees

If you are sharing trustee duties with siblings or other co-trustees, clear communication is key. Establish regular meetings to discuss trust management.

• Checklist:

- Set up a communication plan with co-trustees.

- Document all decisions made during meetings.

Addressing Disputes

Co-trustee disputes can arise, especially among siblings. It’s essential to address any conflicts early to avoid escalation.

• Checklist:

- Encourage open dialogue to resolve issues.

- Consider mediation if disputes become serious.

Red Flag: Co-Trustee Fights

Warning: Be cautious of co-trustee disputes. They can lead to delays in trust administration and potential legal battles.

Day 61-90: Finalizing Decisions and Distributions

Selling Real Estate

If the trust includes real estate that needs to be sold, start preparing for the sale. This involves getting the property appraised and listing it with a real estate agent.

• Checklist:

- Hire a real estate agent experienced in trust sales.

- Obtain a property appraisal to set a fair market price.

Mini Math Example: Selling a House

Let’s say the house is appraised at $800,000. After listing it, you receive an offer of $750,000.

• Sale Price: $750,000

• Closing Costs (approx. 6%): $45,000

• Net Proceeds: $705,000

  
  

This amount will be added to the trust assets and managed according to the trust terms.

Distributions to Beneficiaries

Deciding when to make distributions to beneficiaries can be tricky. It’s essential to ensure that all debts and expenses are settled before making any distributions.

• Checklist:

- Review trust terms regarding distributions.

- Ensure all expenses are paid before distributing assets.

Red Flag: Timing of Distributions

Warning: Be cautious about making distributions too early. Ensure that all obligations are met to avoid personal liability.

Conclusion

Your first 90 days as a trustee in Los Angeles can be a challenging yet rewarding experience. By following this checklist, you can navigate the complexities of trust administration with confidence. Remember to communicate openly with beneficiaries and co-trustees, keep accurate records, and seek professional advice when needed.

With careful planning and attention to detail, you can fulfill your duties effectively and honor the wishes of the trust creator. Embrace this responsibility, and you’ll find that managing a trust can be a meaningful way to support your loved ones during a difficult time.