Executing a living trust after death in California falls to the successor trustee, who works through a defined sequence of duties under the Probate Code and generally finishes in six to twelve months without opening a probate case. Several deadlines start running from the date of death, and a few of them are short, so the order in which you do things matters. What follows is the working sequence, with the hard dates called out where they apply.
First Steps After the Settlor’s Death
Find the original trust document, every amendment, and any pour-over will (a will that funnels stray assets into the trust at death). Read them before you act. The trust names the successor trustee and the order of succession, and it may impose its own procedures on top of the statutory ones.
Accept the appointment in writing. California expects the successor trustee to sign an acceptance of trusteeship confirming both that you agree to serve and that you take on the fiduciary duties that go with it: acting solely in the beneficiaries’ interests, avoiding conflicts, keeping trust property separate from your own, investing with reasonable care, and keeping detailed records. A written acceptance also fixes the date your authority began, which banks and title companies will ask about.
Order at least a dozen certified death certificates from the county vital records office. Banks, brokerages, insurers, government agencies, and the county recorder each want one. Running out mid-administration slows everything down.
The 60-Day Notice to Beneficiaries and Heirs
Within 60 days of the settlor’s death, the successor trustee must mail a formal notification to every trust beneficiary and every legal heir of the deceased settlor. This is required by Probate Code Section 16061.7, and its contents are dictated by statute:
- The name of the settlor and the date the trust was signed.
- The name, address, and phone number of each current trustee.
- The physical address where the trust is being administered.
- A statement that the recipient may request a full copy of the trust terms.
- A boldface warning that the recipient has 120 days from service of the notice to bring a legal action contesting the trust, or 60 days from receiving the trust terms if requested during that 120-day window, whichever is later.
The 60 days run from when the trust becomes irrevocable, which for a standard revocable living trust is the moment the settlor dies. If the trusteeship was vacant at death and a successor is appointed later, the 60 days start when the new trustee begins serving.1California Legislative Information. California Code Probate Code 16061.7 – Notification by Trustee
Lodging the Will Within 30 Days
If the decedent left a will, whoever has the original must deliver it to the clerk of the superior court in the county where the estate could be administered, within 30 days of learning of the death. This applies even when the living trust holds everything and no probate is planned. A person who fails to deliver the will can be held liable for damages caused by the delay.2California Legislative Information. California Code PROB 8200 – Production of Will
Why to Hold Off on Distributions for 120 Days
Once the Section 16061.7 notice is served, a 120-day window opens in which any beneficiary or heir can bring a contest. No statute forbids distributions during this window, but if you distribute and a contest later succeeds, you can be personally on the hook to recover the assets or make up the difference. The prudent approach is to pay necessary bills and administrative expenses while keeping distributable assets intact until the 120 days run or any contest is resolved.
Inventorying and Valuing Trust Assets
Identify and secure every asset the trust owns. Work through bank statements, brokerage accounts, real estate deeds, insurance policies, retirement beneficiary designations, business interests, vehicles, and personal property, and write down a complete inventory. Assets the settlor intended to place in the trust but never actually transferred can sometimes be caught by the pour-over will, though those may still need to run through probate first.
Value every asset at fair market value as of the date of death. This drives the tax basis beneficiaries carry when they later sell. Under federal law, inherited assets receive a stepped-up basis: the tax cost basis resets to fair market value at death rather than what the decedent originally paid.3Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent If the decedent bought stock for $10,000 and it was worth $100,000 at death, the beneficiary’s basis is $100,000. Without solid date-of-death valuations, beneficiaries can overpay capital gains tax later. Professional appraisals are generally worth it for real estate, closely held business interests, and collectibles.
Getting an EIN and Opening a Trust Account
When a revocable trust becomes irrevocable at the settlor’s death, it becomes its own taxable entity. The settlor’s Social Security number no longer works for trust activity. Apply to the IRS for an Employer Identification Number using Form SS-4; the online application returns the EIN immediately.4Internal Revenue Service. Instructions for Form SS-4
Then open a dedicated trust bank account. Rental income, dividends, interest, and other earnings received after the date of death belong to the trust until distribution. Commingling those funds with your own is one of the fastest ways to draw a breach-of-trust claim.
Paying Debts and Handling Creditors
The successor trustee pays the decedent’s outstanding debts, final bills, and administrative expenses from trust assets: final mortgage payment, credit card balances, medical bills, utilities, funeral costs. Trust assets that were subject to the settlor’s power of revocation are available to creditors of the settlor’s estate if the probate estate can’t cover the claims.5California Legislative Information. California Code PROB 19001 – Claims Against Trust Property
Unlike probate, trust administration has no automatic deadline that cuts off creditor claims. Creditors can come forward later than they could in a probate case. When there are significant debts or you suspect unknown creditors, some trustees start a voluntary probate-like creditor notification to force a hard cutoff. That is a decision worth running past an attorney.
Tax Filings
Final Personal Return and Trust Return
File the decedent’s final personal income tax return (Form 1040) covering January 1 through the date of death. Income the decedent received or was entitled to receive before death goes on that return.
Separately, the trust files its own income tax return (Form 1041) for each tax year during administration. Form 1041 reports income earned by trust assets after death, along with deductions and distributions. When the trust distributes income to beneficiaries, the tax obligation generally passes to them via Schedule K-1, which each beneficiary reports on a personal return.6Internal Revenue Service. About Form 1041 – U.S. Income Tax Return for Estates and Trusts
Federal Estate Tax and Portability
For decedents dying in 2026, the federal estate tax exemption is $15,000,000 per individual. Estates below that owe no federal estate tax; estates above it pay 40% on the excess.7Internal Revenue Service. Whats New – Estate and Gift Tax If gross value (including adjusted taxable gifts) exceeds $15,000,000, the trustee files IRS Form 706.
Even for estates well under the exemption, a surviving spouse may want Form 706 filed to make a portability election, which preserves the deceased spouse’s unused exemption. If the surviving spouse later has a taxable estate, that preserved amount can shelter up to another $15,000,000, for a combined $30,000,000. Missing this election can cost a surviving spouse millions in estate tax later.8Internal Revenue Service. Frequently Asked Questions on Estate Taxes
Transferring Real Estate and the Prop 19 Problem
To establish authority over trust real estate, record an Affidavit of Death of Trustee with the county recorder where the property sits. It must be notarized and accompanied by a certified death certificate. When you later deed the property to a beneficiary, file a Preliminary Change of Ownership Report at the same time.
Property tax reassessment is where the real financial hit lands. When California real property changes ownership, the county assessor reassesses it to current market value. A home held for decades at a low assessed value can see its annual property tax bill multiply.
Proposition 19, effective February 2021, narrowed the parent-to-child exclusion. To qualify, the property must have been the parent’s principal residence, and the child must make it the child’s own principal residence within one year of transfer. The child must also file for the homeowners’ or disabled veterans’ exemption within that same one-year window.9California State Board of Equalization. Proposition 19 Fact Sheet
Even when the exclusion applies, it’s capped. The property’s taxable value is preserved only up to the old assessed value plus $1,044,586 (the adjusted amount for transfers between February 16, 2025 and February 15, 2027). If market value exceeds that ceiling, the difference gets added to the old taxable value.10California Legislative Information. California Code Revenue and Taxation Code 63.2 – Parent-Child Transfer Exclusion
For rental properties, vacation homes, and other investment properties, the parent-child exclusion does not apply at all under Prop 19. Those properties reassess to full market value. If a beneficiary is inheriting a property they don’t plan to live in, the property tax jump can change whether keeping it makes financial sense. The exclusion claim form has to be filed with the county assessor within three years of the transfer date.9California State Board of Equalization. Proposition 19 Fact Sheet
Trustee Compensation
If the trust document sets the trustee’s compensation, that controls. If it’s silent, California allows the successor trustee reasonable compensation under the circumstances.11California Legislative Information. California Code Probate Code 15681 – Trustee Compensation There is no fixed statutory fee schedule. Professional and corporate trustees commonly charge between 0.5% and 1.5% of trust asset value annually, and family member trustees may also take compensation. Track your hours and tasks. Beneficiaries can challenge fees they consider excessive, and excessive compensation is itself grounds for court removal.
The Final Accounting
Before distributing, the successor trustee provides a final accounting to all beneficiaries. Probate Code Section 16062 requires trustees to account at least annually and at the trust’s termination.12California Legislative Information. California Code Probate Code 16062 – Duty to Account The accounting must show:
- Every dollar of income and principal received and disbursed during the period.
- Assets and liabilities of the trust at the end of the period.
- Trustee compensation paid.
- Any agents hired (attorneys, accountants, appraisers), their relationship to the trustee if any, and what they were paid.
- A statement that the beneficiary can petition the court for a review.
- A statement that claims for breach of trust cannot be brought more than three years after the beneficiary receives the accounting.
The three-year warning matters. Under Probate Code Section 16460, a beneficiary who receives an accounting that adequately discloses a potential breach has three years from receipt to sue. If the accounting doesn’t adequately disclose the issue, the clock doesn’t start until the beneficiary discovers or reasonably should have discovered it.13Justia Law. California Code Probate Code 16460-16465 – Limitations on Proceedings Against Trustees Thorough, transparent accounting is the single best step a trustee can take to protect themselves.14California Legislative Information. California Code Probate Code 16063 – Contents of Account
Distribution and Closing the Trust
Once the 120-day contest window has passed, debts and taxes are paid, and the accounting has been approved or waived, distribute what remains according to the trust’s terms. Assets can go directly to beneficiaries (a house, a brokerage account, a piece of jewelry) or be sold and distributed as cash, depending on what the trust directs and what beneficiaries agree to.
Disclaimers
A beneficiary who doesn’t want an inheritance can file a qualified disclaimer, treating the assets as if they were never transferred to that person. Federal law requires the disclaimer to be in writing, delivered within nine months of the settlor’s death, and the beneficiary must not have already accepted the property or any of its benefits. The disclaimed assets then pass to whoever the trust names next, without input from the person disclaiming.15Office of the Law Revision Counsel. 26 USC 2518 – Disclaimers Disclaimers are sometimes used for tax planning, so bring in an attorney or tax advisor if one comes up.
Receipts and Final Steps
Get a signed receipt from every beneficiary confirming what they received. You can’t force a beneficiary to sign a broader liability release, but a receipt documenting the specific assets delivered protects you if a question surfaces later. After distributions are complete, close the trust’s bank accounts, file the final Form 1041 for the trust’s last tax year, and keep the records. Administration ends when the last asset leaves the trustee’s control, but exposure to breach-of-trust claims continues for three years after the final accounting is delivered.13Justia Law. California Code Probate Code 16460-16465 – Limitations on Proceedings Against Trustees