The Trust Administration Process in California: A Complete Overview

If you're facing trust administration for the first time, the process can feel overwhelming. What steps are required? How long will it take? What are the legal obligations?

This guide provides a high-level overview of the entire California trust administration process from start to finish—so you understand the big picture before diving into the details.

What Is Trust Administration?

Trust administration is the process of managing and distributing a living trust's assets after the trust creator (grantor/settlor) dies. It's the trust equivalent of probate—but faster, cheaper, and private because it happens outside the court system.

The goal: Carry out the grantor's wishes by paying debts, handling taxes, and distributing assets to the people the grantor chose to receive them.

Trust Administration vs. Probate

Factor	Trust Administration	Probate
Court involved?	No (usually)	Yes
Timeline	3-12 months	12-18+ months
Cost	$3,000-$15,000 typical	$25,000-$100,000+
Privacy	Completely private	Public record
Court supervision	None	Required
Flexibility	Trustee-directed	Court-controlled

Trust administration is generally simpler and more flexible because there's no judge looking over your shoulder at every step.

Who Is Involved?

The Successor Trustee

The person who takes over management of the trust after the grantor dies. They're responsible for the entire administration process.

Key responsibilities:

• Securing and managing assets
• Sending required notices
• Paying debts and taxes
• Distributing to beneficiaries

The Beneficiaries

The people entitled to receive trust assets. They have rights to:

• Receive notice of the trust
• Request information about the trust
• Receive accountings
• Receive their distributions

Professional Advisors

Most trust administrations involve:

• Attorney: Legal guidance and document preparation
• CPA/Accountant: Tax return preparation
• Appraiser: Asset valuations (if needed)
• Financial advisor: Investment management (if needed)

The Trust Administration Process: 7 Phases

Phase 1: Taking Control

When: Immediately after death Duration: 1-2 weeks

What happens:

The successor trustee steps into their role and takes control of trust assets. Unlike probate, there's no court appointment needed—authority begins automatically.

Key tasks:

• Locate and review the trust document
• Obtain death certificates (10-15 copies)
• Secure the home and valuables
• Notify key parties (banks, insurance, etc.)
• Begin identifying all trust assets

Critical point: The trustee has authority from day one, but should act carefully until they fully understand the trust's terms and assets.

Phase 2: Establishing Authority

When: Weeks 2-4 Duration: 2-3 weeks

What happens:

The trustee formalizes their authority and sets up administrative infrastructure.

Key tasks:

• Apply for trust EIN (tax ID number)
• Open trust bank account
• Prepare trustee certification
• Record affidavit of death (for real property)
• Notify financial institutions
• Establish record-keeping system

Critical point: Use the trust's EIN—not the deceased's Social Security number—for all trust transactions going forward.

Phase 3: Notice and Inventory

When: Month 1-2 Duration: 4-8 weeks

What happens:

The trustee sends legally required notices and creates a comprehensive inventory of everything the trust owns and owes.

Key tasks:

• Send 60-day notice to all beneficiaries and heirs (REQUIRED)
• Inventory all assets with values
• Inventory all debts and liabilities
• Obtain appraisals where needed
• Document date-of-death values (for tax purposes)

Critical point: The 60-day notice deadline is strict. Missing it can extend the trust contest period indefinitely.

Phase 4: Administration Period

When: Months 2-5 Duration: 3-4 months (minimum)

What happens:

The trustee manages trust assets, pays ongoing expenses, addresses creditors, and waits for the contest period to expire.

Key tasks:

• Manage real property (maintenance, insurance, taxes)
• Collect income (rent, dividends, interest)
• Pay legitimate debts
• Maintain insurance coverage
• Communicate with beneficiaries
• Wait for 120-day contest period to pass

Critical point: Don't rush to distribute assets. The 120-day contest period must expire first, and all debts and taxes must be addressed.

Phase 5: Taxes

When: Throughout administration, with specific deadlines Duration: Ongoing

What happens:

The trustee handles all tax obligations for both the deceased person and the trust.

Tax returns typically required:

Return	What It Covers	Deadline
Final Form 1040/540	Deceased's income (Jan 1 - death date)	April 15 following year
Form 1041/541	Trust income after death	April 15 following year
Form 706	Estate tax (if over $13.61 million)	9 months from death

Critical point: Tax mistakes can be costly. Most trustees work with a CPA for this phase.

Phase 6: Distribution

When: After contest period and debts/taxes settled Duration: 2-8 weeks

What happens:

The trustee distributes trust assets to beneficiaries according to the trust's terms.

Key tasks:

• Calculate each beneficiary's share
• Prepare transfer documents (deeds, assignments)
• Distribute cash to beneficiaries
• Transfer real estate
• Distribute investments
• Deliver personal property
• Obtain receipts from beneficiaries

Distribution methods by asset type:

Asset	How It's Distributed
Cash	Check or wire transfer
Real estate	Trustee's deed recorded with county
Investments	Transfer to beneficiary's account
Vehicles	Title transfer at DMV
Personal property	Physical delivery

Critical point: Get signed receipts from every beneficiary acknowledging what they received.

Phase 7: Closing

When: After all distributions complete Duration: 2-4 weeks

What happens:

The trustee wraps up all remaining tasks and formally closes the trust administration.

Key tasks:

• Prepare final accounting
• Provide accounting to beneficiaries
• File final trust tax returns
• Close trust bank accounts
• Obtain releases from beneficiaries (recommended)
• Store records securely

Critical point: Keep all records for at least 5-7 years in case questions arise later.

Timeline: How Long Does It Take?

Trust administration timelines vary based on complexity:

Simple Trust: 3-6 Months

• One or two beneficiaries
• No real estate (or simple transfer)
• Few accounts
• No disputes
• Cooperative beneficiaries

Moderate Trust: 6-12 Months

• Multiple beneficiaries
• Real estate to sell
• Multiple accounts
• Some tax complexity
• No significant disputes

Complex Trust: 12-18+ Months

• Many beneficiaries
• Multiple properties
• Business interests
• Tax complications
• Disputes or litigation
• Sub-trusts required

Key Deadlines to Remember

Deadline	Task
Immediately	Secure assets
ASAP	Get death certificates
60 days	Send statutory notice to beneficiaries/heirs
120 days after notice	Contest period expires
April 15	Deceased's final income tax return
April 15	Trust income tax return
9 months	Estate tax return (if required)

Common Complications

Real Estate Sales

If the trust owns property that must be sold:

• Add 3-5 months to timeline
• Requires listing, selling, and closing
• Title issues may need resolution
• Capital gains implications

Business Interests

If the trust includes business ownership:

• Valuation required
• May need to coordinate with partners
• Operating agreements affect options
• Can significantly extend timeline

Family Disputes

If beneficiaries are in conflict:

• Everything takes longer
• May require mediation
• Could escalate to litigation
• Costs increase substantially

Tax Complications

If tax issues are complex:

• Estate tax returns take months
• Audits can delay closure
• Amended returns may be needed
• Professional help essential

What Can Go Wrong?

Missing the 60-day notice deadline: Contest period never starts; trust remains in limbo.

Distributing too early: If a claim arises later, trustee may be personally liable.

Poor record-keeping: Can't prove what happened; vulnerable to challenges.

Ignoring beneficiaries: Breeds suspicion; may trigger legal action.

Tax mistakes: Penalties, interest, and potential personal liability.

Self-dealing: Using trustee position for personal benefit is prohibited.

When Court Gets Involved

Most trust administrations never see a courtroom. But courts can get involved for:

• Trust contests (challenges to validity)
• Disputes between trustee and beneficiaries
• Requests to interpret unclear trust terms
• Trustee removal petitions
• Approval of trustee fees
• Modification of irrevocable trusts

If litigation occurs, the process becomes longer and more expensive.

Do You Need an Attorney?

Technically, no. California law doesn't require attorney involvement.

Practically, usually yes. Most trust administrations benefit from professional guidance:

• Ensures legal requirements are met
• Protects trustee from liability
• Handles complex documents
• Navigates tax issues
• Prevents costly mistakes
• Attorney fees come from trust assets

Consider DIY only if:

• Trust is extremely simple
• No real estate involved
• Only one or two beneficiaries
• Everyone gets along
• You have relevant experience

Understanding the Big Picture

Trust administration follows a logical progression:

1. Take control → Secure assets and understand what you're working with
2. Establish authority → Set up the infrastructure to act as trustee
3. Notify and inventory → Tell required parties and document everything
4. Administer → Manage assets, pay debts, wait for contest period
5. Handle taxes → File all required returns
6. Distribute → Give beneficiaries what they're entitled to
7. Close → Wrap up and store records

Each phase builds on the previous one. Trying to skip steps or rush the process creates problems.

Frequently Asked Questions

How is trust administration different from probate in California?

Trust administration happens outside the court system, making it faster, cheaper, and completely private. While probate typically takes 12-18 months and costs $25,000-$100,000 with court supervision at every step, trust administration usually takes 3-12 months and costs $3,000-$15,000 with no court involvement. The trustee has authority to act immediately upon the settlor's death without waiting for court appointment. All proceedings remain private rather than becoming public record. However, trustees still have fiduciary duties and must follow California trust law, just without ongoing court oversight.

When can I start distributing assets to beneficiaries?

You cannot distribute assets until several conditions are met. First, the 120-day contest period following the required beneficiary notices must expire. All legitimate debts and expenses must be paid or reserved for. Required tax returns must be filed or sufficient funds set aside for taxes. All assets must be properly inventoried and valued. The trust must have sufficient liquidity for any remaining expenses. Distributing too early can make you personally liable if claims arise later or if the trust lacks funds to pay taxes. Most distributions occur 5-8 months after death at the earliest.

Do I need to hire an attorney for trust administration?

California law doesn't require attorney involvement, but most trust administrations benefit from professional guidance. Attorneys ensure legal requirements like the 60-day beneficiary notice are met, prepare complex documents like trustee's deeds for real property, coordinate with CPAs on tax planning and filing, and protect trustees from personal liability. Consider handling it yourself only if the trust is extremely simple with no real estate, has only one or two cooperative beneficiaries, everyone agrees on distributions, and you have relevant experience. Attorney fees are paid from trust assets, not your personal funds.

What is the 120-day contest period and why does it matter?

After you send the required notices to beneficiaries and heirs, California law gives them 120 days to contest the trust's validity. During this period, they can challenge the trust based on lack of capacity, undue influence, fraud, or other grounds. You cannot safely make final distributions until this period expires because a successful contest could change who receives what. The contest period only begins running after you properly send the 60-day notices. If you never send the notices, the contest period never starts, and the trust can be challenged indefinitely.

What happens if beneficiaries disagree during trust administration?

Beneficiary disputes complicate and extend the administration process. Common conflicts involve disagreements over property valuations, distribution timing, specific property allocation, or trustee decisions. First, try to resolve disputes through open communication and sharing information. Consider formal mediation with a neutral third party if direct communication fails. If disputes involve questions of trust interpretation, you may need to petition the court for instructions. Serious conflicts alleging trustee misconduct may require litigation. Document all communications and decisions carefully to protect yourself. Disputes can extend administration by 6-18 months and significantly increase costs.

Need Guidance?

The Law Offices of Rozsa Gyene guides trustees through every phase of California trust administration. We help you understand the process, meet your deadlines, and fulfill your duties properly.

Call (818) 291-6217 for a consultation, or visit our contact page.

Serving Glendale, Burbank, Pasadena, and all of Los Angeles County.

---

This article provides a general overview of the trust administration process in California. Every trust is different. Consult an attorney for guidance specific to your situation.

---