- Conduct a thorough search for all estate planning documents. Look for all current and revoked wills, pour-over wills, trusts, powers of attorney, trust amendments and restatements, trust schedules, trust asset lists, and deeds to trust property. Put all documents in order based on date of execution.
- Collect all previously prepared trust related documents such as estate tax returns, gift tax returns, trust tax returns, prior accountings of trust assets, notices of proposed action, and any principal and income adjustment actions.
- Determine whether the Uniform Prudent Investor Rule applies to the trust.
- Read estate planning documements, and set aside any previously revoked documents. Once you find the most current trust, read it carefully again from beginning to end. Make notes of anything you find unusual (note the page and paragraph number in your notes for easy reference).
- Identify all interested persons, including heirs, successor trustees, current beneficiaries and remainder beneficiaries. Obtain their complete names, addresses, telephone numbers, email addresses, age, and any other contact information you can find. (Warning: failure to use due dilligence in correctly identifying, locating and notifying all interested parties could expose you to financial liability.)
- Retain legal counsel to assist you with trust administration duties. You have the legal right to use trust funds to pay an attorney to assist you with the administrative process. Failing to retain counsel is not a valid defense for any errors made during the trust administrative process.
- Initial meeting with your attorney:
1.) start by understanding your attorney’s scope of representation
2.) make sure your attorney reviews trust terms with you
3.) make sure your attorney explains your fiduciary duties as trustee
4.) make sure your attorney reviews trust circumstances and purpose with you
5.) discuss any emergencies (pending litigation, needs of beneficiaries, etc.)
- Obtain tax payer identification number for irrevocable trusts. If you are the Trustee you can obtain that number by calling the Internal Revenue Service at: 1 (800) 829-4933.
- If you have liquid trust assets, immediately open a trust checking and savings account. Make sure you maintain a penny accurate accounting of all trust assets. Your deposits must be FDIC insured.
- Establish a record keeping system. At a minimum it should include folders for financial records, beneficiary communications–including notes from telephone calls and copies of all letters sent and received, beneficiary meeting minutes and a journal of actions and communications.
- Make a complete and detailed inventory of all trust assets. Each asset should be described and immediatly assigned a date of death value for estate tax purposes. If you have assets that are difficult to value, consider hiring a professional appraiser. Discuss it with your attorney.
- Review trust assets and make and implement decisions concerning the retention and disposition of assets, in order to bring the trust portfolio into compliance with the purposes, terms, distribution requirements, and other circumstances of the trust, and with the requirement of Probate Code Section 16049.
- Send Probate Code Section 16061.7 Notice to all named beneficiaries and heirs within 60 days of the settor’s death.
- Determine whether the amount of trust assets warrant an investment manager. If investment decisions are necessary, meet with your attorney regarding the drafting of investment strategy guidelines and to determine if court approval is necessary to carry out the strategy.
- Divide trust assets into subtrust as required under the terms of trust.
- Publish and send appropriate creditor notices.
- Pay attention to the following dates:
1.) Probate Code Section 13100 affidavit (no sooner than 40 days after date of death “DOD”)
2.) Alternate asset valuation date (6 months after DOD)
3.) Disclaimer (9 months after DOD)
4.) Form 706, Estate Tax Return (Due 9 months after DOD or file extension)
5.) Change of ownership forms (Due 150 days after DOD)
6.) Medi-Cal Notice to Dept. of Health Services (90 days after DOD)
- File notice of death of real property owner with the county assessor’s office.
- Prepare and send accounting to beneficiaries identifying all assets, debts, income and expenses.
- Distribute assets to beneficiaries (at least 120 days after giving 16061.7 notice)
- Obtain receipts from beneficiaries showing proof of distributions.