If you have been named to manage someone’s trust in California, your legal title is trustee, not executor — an executor handles a will through probate court, while a trustee administers a trust outside of it. The duties of an executor of a trust in California, properly called a trustee’s duties, come from the trust document itself and the California Probate Code, and they cover safeguarding assets, notifying beneficiaries, investing prudently, keeping records, paying debts and taxes, and distributing what remains exactly as the trust directs.
The role is legally serious. Courts hold trustees to fiduciary standards, and mistakes can come out of your own pocket. Here is what the job actually requires.
Start by Reading the Trust and Securing the Assets
Before you do anything else, read the trust document from beginning to end. It tells you who the beneficiaries are, what the trust owns, when and how distributions happen, and what powers or limits apply to you. Every decision you make has to line up with those terms, and with California law where the trust is silent.
Then locate and take control of every asset. That can include real estate, bank and brokerage accounts, business interests, vehicles, and personal property. California Probate Code § 16006 requires you to take reasonable steps to gain control of and preserve trust property, and § 16009 requires you to keep trust assets separate from your own and clearly labeled as trust property.1Justia. California Probate Code 16000-16015 Commingling trust funds with your personal accounts is one of the fastest routes to a breach claim.
If the trust becomes irrevocable at the settlor’s death, apply for an Employer Identification Number from the IRS. A revocable trust uses the settlor’s Social Security number during their life, but once they die the trust is its own taxpaying entity and needs its own EIN before you can open trust bank accounts or file returns.2Internal Revenue Service. Understanding Your EIN
Send the Notice to Beneficiaries Within the Statutory Window
California Probate Code § 16061.7 requires you to send a written notice to all beneficiaries and to the settlor’s heirs when a revocable trust becomes irrevocable, which normally means when the settlor dies.3California Legislative Information. California Probate Code 16061-7 The notice has to include your name and address as trustee, tell each recipient they can request a copy of the trust, and explain their right to receive accountings.
The notice also starts a 120-day clock. Beneficiaries and heirs have that long to file a contest challenging the trust. After it runs, they lose standing. As trustee, you generally should hold off on significant distributions until the window closes. Skipping the notice altogether does not protect you; it leaves you exposed for years, because the contest period never begins running without it.
Your Core Fiduciary Duties
Three obligations sit at the heart of the role.
Loyalty
You must administer the trust solely in the beneficiaries’ interest. California Probate Code § 16002 sets that as the baseline, and it means your own financial benefit cannot factor into trust decisions.4California Legislative Information. California Probate Code 16002
Impartiality
When multiple beneficiaries are involved, you have to treat them fairly. That is not always equally, since the trust may direct otherwise, but you cannot favor one at another’s expense unless the document tells you to.5California Legislative Information. California Probate Code 16003 A recurring tension: income beneficiaries prefer high-yield investments, while remainder beneficiaries prefer growth. You have to balance both.
Avoiding Conflicts of Interest
California Probate Code § 16004 forbids you from using trust property for your own profit or entering any transaction where your personal interest conflicts with the beneficiaries’.6California Legislative Information. California Probate Code 16004 Any transaction between you and a beneficiary during the trust that gives you an advantage is presumed to be a violation. The burden falls on you to prove the deal was legitimate.
Investing and Protecting Trust Property
California applies the Uniform Prudent Investor Act, at Probate Code §§ 16045–16054. The standard asks what a prudent investor would do given the trust’s specific purposes, distribution needs, and circumstances.7California Legislative Information. California Probate Code 16045-16054 You need reasonable care, skill, and caution. You do not have to be a professional money manager, but concentrating everything in one stock, or leaving large sums in a non-interest-bearing account, can get you in trouble. Performance is judged on the whole portfolio, not on any single position.
You also have to physically protect assets — maintain real property, keep appropriate insurance, and safeguard valuables. Section 16240 gives you express power to insure trust property against loss and to insure yourself against third-party liability.8Justia. California Probate Code 16220-16249 Letting a homeowner’s policy lapse on a trust-owned house is the kind of avoidable failure that leads to a surcharge claim.
Keeping Records and Providing Accountings
California Probate Code § 16060 requires you to keep beneficiaries reasonably informed about the trust and its administration.9California Legislative Information. California Probate Code 16060-16064 That means detailed records of every transaction: income received, expenses paid, distributions made, investment changes.
Section 16062 requires formal accountings at least annually, when the trust terminates, and whenever the trustee changes. They go to each beneficiary currently entitled to distributions or eligible for them at your discretion. Section 16063 sets out the contents: all receipts and disbursements of principal and income during the period, plus a snapshot of assets and liabilities at the end.
Sloppy recordkeeping is where most trustee disputes start. If a beneficiary later objects and you cannot produce documentation, a court will draw unfavorable inferences against you. Keep bank statements, receipts, invoices, brokerage confirmations, and correspondence organized from day one.
Paying Debts and Filing Tax Returns
When a trust becomes irrevocable at the settlor’s death, you typically need to identify and settle the settlor’s outstanding debts along with any debts of the trust — medical bills, credit card balances, funeral expenses. Handling debts before distributing to beneficiaries protects you from personal exposure if a creditor surfaces later.
Income Tax Returns
An irrevocable trust is a separate taxpayer. You must file IRS Form 1041 for any year the trust has gross income of $600 or more, and issue a Schedule K-1 to each beneficiary who received a distribution, since much of the trust’s income flows through to their individual returns.10Internal Revenue Service. 2025 Instructions for Form 1041 and Schedules A, B, G, J, and K-1 On the California side, the Franchise Tax Board requires fiduciary income tax returns for trusts with California-source income or California resident beneficiaries.11California Franchise Tax Board. Estates and Trusts
Federal Estate Tax
If the settlor’s estate exceeds the federal exemption, a Form 706 estate tax return may be required. For decedents dying in 2026, the basic exclusion amount is $15,000,000.12Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Estates below that owe no federal estate tax, though a return is sometimes filed anyway to elect portability of the unused exemption for a surviving spouse. California does not impose its own estate tax or inheritance tax.
Missed tax deadlines produce penalties that come out of trust assets, meaning the beneficiaries pay for your oversight. Hiring an accountant to handle trust taxes is a legitimate expense of the trust.
Trustee Compensation and Reimbursement
Serving as trustee is real work, and California recognizes that. If the trust document sets compensation, that controls. If the trust is silent, California Probate Code § 15681 entitles you to reasonable compensation under the circumstances. Reasonable depends on the size and complexity of the trust, the time involved, and the skill required. Professional corporate trustees typically charge an annual percentage of assets; individual trustees, often family members, charge less or nothing.
You are separately entitled to reimbursement for legitimate out-of-pocket expenses: attorney fees for trust administration, accountant fees for tax preparation, real estate broker commissions on sales of trust property, appraisal fees. Document every expense. Beneficiaries can challenge any reimbursement that looks excessive or unrelated to trust business.
Distributing Assets and Closing the Trust
After debts and taxes are paid, distribute the remaining assets exactly as the trust directs. Some trusts call for outright distribution; others create sub-trusts for minor children or require staggered payouts at certain ages. Follow the terms precisely. Deviating from the distribution scheme, even with good intentions, exposes you to a breach claim from any beneficiary who received less than they were owed.
Before closing, give every beneficiary a final accounting covering every transaction from the start of your administration (or the last accounting) through the final distribution. After distributing, get written receipts or releases from each beneficiary confirming they received their share and approve your administration. A signed release substantially reduces the odds of a beneficiary coming back years later with a claim.
The final mechanical steps: close trust bank accounts, transfer title on real property and vehicles into beneficiaries’ names, update beneficiary designations on any remaining accounts. Keep the trust records — bank statements, tax returns, receipts, correspondence — for several years after closing. Tax authorities can audit prior returns, and a disgruntled beneficiary can still surface with a late claim.
Do Not Forget Digital Assets
California adopted the Revised Uniform Fiduciary Access to Digital Assets Act at Probate Code §§ 870–884, which gives trustees authority to manage the settlor’s digital property. Digital assets include email, social media accounts, cryptocurrency wallets, digital photo libraries, online business accounts, and domain names. The same duties of care, loyalty, and confidentiality apply.
If you are the original user of a digital account held in trust, you generally have full access. If not, you can request access from the platform by providing a certified copy of the trust instrument and a sworn statement that you are the current trustee. Some platforms require additional identifying information. These requests take time, so start early and document every one. Overlooking digital assets is increasingly common and can mean lost cryptocurrency, lapsed domain names, or recurring subscription charges draining trust funds.
What Happens if You Breach Your Duties
Trustees who fall short face real financial consequences. California Probate Code § 16420 authorizes courts to compel restoration of losses, reduce or eliminate trustee compensation, order corrective accountings, and remove the trustee. The goal is to restore the trust to the position it would have been in without the breach.
A court can surcharge you for more than what you took directly. Surcharge covers losses from mismanagement, profits you earned through the breach, interest on withheld funds, and depreciation caused by inaction. The measure is the harm to the trust, not the benefit to you, so the total can exceed what you personally gained.
Beneficiaries do not have forever to bring a claim. California Probate Code § 16460 sets limitations periods that generally run from the date you deliver an accounting disclosing the relevant transaction. If the accounting does not adequately disclose the claim, the clock may not start until the beneficiary discovers or should have discovered the breach. Clear, thorough accountings protect you as much as they protect beneficiaries, because full disclosure starts the clock and caps your long-term exposure.