Most people facing this role learn about it at the worst possible moment. A parent or spouse has died, a binder with the trust in it has surfaced, and a brother, a sister or a stepparent is already asking what happens next. The person named as trustee is often grieving, has never done this before, and wants to know two things: what the law actually requires, and what can safely wait.
This guide walks through the role in the order a trustee meets it. It covers when the job begins, the duties that come with it, the first notice to beneficiaries, accountings, managing and handing out property, the limits on what a trustee may do, and how the job ends.
What a Trustee Is and When the Role Begins
A trustee is the person who holds the trust's property and manages it for other people, the beneficiaries. The California Franchise Tax Board's Estates and trusts page describes a trust as "an agreement to hold and administer property," in which a trustee "is responsible for managing property for someone else (beneficiary)." A successor trustee is the person the trust names to take over when the first trustee can no longer serve, often after the person who made the trust has died.
A trustee is not an executor. An executor is the person named in a will to handle a probate estate, the property that passes through the superior court. Probate Code section 8200 refers to "the person named in the will as executor." When there is no will, the court appoints an administrator, and Probate Code section 8461 sets the order of who is entitled to that appointment. It starts with the surviving spouse or domestic partner, then children, then grandchildren, and the list continues. One person can hold both jobs, but they are separate roles over separate property.
When the role begins depends on the trust's own words. The document usually says who succeeds and on what event, such as a death or incapacity as the trust defines it. Probate Code section 16000 then sets the starting rule: once the trustee accepts the trust, the trustee must administer it according to the trust instrument and, except where the instrument provides otherwise, according to the trust law of the Probate Code. The trust document can add duties of its own.
The Core Duties Every California Trustee Owes
For the family, these duties mean one thing: the trustee is now working for the beneficiaries, not for themselves. The Probate Code sets out the trustee's duties in the sections beginning at section 16000. Three of them shape nearly every decision.
Loyalty. Probate Code section 16002 says "the trustee has a duty to administer the trust solely in the interest of the beneficiaries." The section allows one narrow exception. A trustee who runs two trusts may sell or exchange property between them if the deal is fair and reasonable to the beneficiaries of both trusts and the trustee tells those beneficiaries all the material facts. Probate Code section 16015 adds that a regulated financial institution serving as trustee does not breach this duty by providing its ordinary paid services to the trust.
Impartiality. Under Probate Code section 16003, when a trust has two or more beneficiaries, the trustee must deal with them impartially and act impartially in investing and managing trust property, "taking into account any differing interests of the beneficiaries." That matters when, for example, one beneficiary receives income now and others receive what is left later.
Following the document. The trust instrument comes first, under section 16000.
In practice, trustees commonly keep trust money in accounts held in the trust's name, away from their own funds, and keep a record of every dollar in and out. Those habits make the reporting duties described below possible. The Probate Code also addresses investing trust property and pursuing or defending the trust's claims. A probate or trust attorney can say how those rules apply to a particular trust.
Notice to Beneficiaries and the 120-Day Rule
One of the first formal tasks has a fixed deadline. Under Probate Code section 16061.7, the continuing or successor trustee must serve a "notification by trustee" when a revocable trust, or part of it, becomes irrevocable because a settlor (the person who created the trust) has died. The section also requires notice in a few other events, including a change of trustee of an irrevocable trust. Any one cotrustee may serve it.
The notice goes to each beneficiary of the irrevocable trust, subject to a limit in another section, and, when the event is a settlor's death, to each heir of the deceased settlor. A charitable trust supervised by the Attorney General also requires notice to the Attorney General. It is served by a method the Probate Code specifies, to the last known address. The deadline is 60 days after the event, or 60 days after the trustee learns of a person entitled to notice whom the trustee did not know of at the time. If the trustee's office was vacant, the 60 days start when the new trustee begins to serve.
The notice must include all of the following:
- The identity of the settlor or settlors and the date the trust instrument was signed.
- The name, address and telephone number of each trustee.
- The address where the trust is principally administered.
- Any additional information the trust instrument expressly requires.
- A statement that the recipient may, on reasonable request, receive a true and complete copy of the trust terms.
After a death, the notice must also carry a separate warning in at least 10-point bold type: "You may not bring an action to contest the trust more than 120 days from the date this notification by the trustee is served upon you or 60 days from the date on which a copy of the terms of the trust is delivered to you during that 120-day period, whichever is later." A settlor cannot waive this notice. Many trustees use a delivery method that leaves a record of when each notice went out. This notice is separate from any court filing; it applies even when no probate case is opened.
"Where did the money go?" is not an unreasonable question from a beneficiary. It is the question the law expects a trustee to answer. Probate Code section 16060 states: "The trustee has a duty to keep the beneficiaries of the trust reasonably informed of the trust and its administration."
The accounting duty is more specific. Probate Code section 16062 provides that, except as that section and a related section provide, the trustee must account at least once a year, at the end of the trust, and when the trustee changes. The accounting goes to each beneficiary to whom income or principal must be, or may in the trustee's discretion be, currently distributed. That may not be every beneficiary. A beneficiary who receives property only later, after someone else's interest ends, may not be among them.
Section 16062 also has exceptions. A trustee of a living trust signed before July 1, 1987, is not subject to this duty to account. Trusts created by older wills have their own rules. The section further limits when a trust document's waiver of accountings is effective, and makes such a waiver void for certain sole trustees.
In general terms, an accounting shows what the trust held at the start of the period, what came in, what went out and why, and what remains at the end. The exact required contents are set in a different section, and an attorney or a CPA who prepares trust accountings can say what a given accounting needs to include. Whether beneficiaries may waive an accounting in a particular trust is also a question for an attorney, given section 16062's limits.
Managing and Distributing Trust Assets
The practical work starts with a list. A trustee usually gathers statements, deeds and account information to find everything the trust owns: bank and investment accounts, real property, and personal property such as furniture, jewelry and vehicles. Not everything the person owned is in the trust. Under Probate Code section 5302, money left in a joint account generally belongs to the surviving account holder, and a payable-on-death account goes to the named payee, subject to the conditions that section states. Property outside the trust may pass by its own terms or through the estate. The California estate settlement guide describes those other paths.
Real property is handled differently from personal property. Title to a house in the trust is held by the trustee, and a successor trustee usually records a document with the county recorder showing their authority. A probate attorney or title company can say which document fits. Property tax raises its own question. Under Rev. & Tax. Code section 63.2, a transfer of a parent's principal residence to a child, including through a trust, may be excluded from reassessment if a claim is filed and the child makes it their own principal residence within one year. The value excluded is capped. The State Board of Equalization's Proposition 19 Fact Sheet explains those limits and the filing periods. The county assessor's office handles the claim. The inherited house guide covers the details.
Before distributing, trustees generally pay valid debts and the costs of running the trust. Taxes also come up. The FTB's Estates and trusts page says a trustee may have to file Form 541 when certain residency or income conditions are met, and when gross income is over $10,000 or net income is over $100 (page last updated February 24, 2026). A CPA, an enrolled agent or a tax attorney reviews the trust's and the decedent's income tax filings.
Distributions then follow the trust's terms, not the trustee's preferences. Whether to keep, rent or sell a house is a decision the keep, rent or sell comparison lays out. Who has authority to sell depends on the trust's terms and the Probate Code.
What a Trustee Cannot Do: Conflicts, Self-Dealing, and Limits
The limits on a trustee all follow from the duty of loyalty in section 16002. A trustee manages someone else's inheritance. Using the trust to benefit oneself at the beneficiaries' expense works against the duty to administer "solely in the interest of the beneficiaries."
Situations that raise this concern include buying trust property for oneself, borrowing trust money, and mixing trust funds with personal funds. Being a beneficiary does not change the duty. A trustee who is also a beneficiary still owes loyalty and impartiality to every other beneficiary. Whether a particular transaction is allowed often depends on what the trust document says and on Probate Code rules that an attorney can apply to the facts. Trustee pay works the same way. The trust document may address it, and an attorney can say how California law treats compensation where the document is silent.
When a beneficiary believes a trustee has acted improperly, that is a contested matter. It belongs with an attorney who litigates trust and probate cases, and this guide does not cover removing a trustee or proving misconduct.
Many trustee questions never reach that point. A clear notice, regular accountings, and records that show every transaction answer most of what worried relatives want to know.
When the Trustee's Job Is Done: Closing the Trust
Closing the trust is the trustee's last act of service to the family. Doing it carefully protects the beneficiaries and the trustee alike. A trust generally ends when its property has been distributed as its terms direct and its obligations have been paid. The trust document says when that point arrives. A trust that holds property for a minor, or for a person with a disability, may continue until a stated age or condition is met.
Section 16062 lists the end of the trust as one of the times a trustee must account. A final accounting gives beneficiaries a last full picture before the property leaves the trustee's hands. Many trustees also ask beneficiaries to sign a receipt for what they receive, and sometimes a release. What a receipt or release does for the trustee is a question for a trust attorney.
After the last distribution, trustees commonly keep the trust's records for a period, because tax questions or a beneficiary's question can come up later. Where real property was distributed, the recorded deed out of the trust becomes part of the county's records. County offices differ, and the San Diego County estate guide is one example of how a county's offices fit together.
