If you're a first-time trustee in Mission Viejo or the surrounding South Orange County area, this checklist is for you. It breaks down the complex process of trust administration into manageable steps to help you fulfill your duties with confidence.
Understanding Your Core Duty: Fiduciary Responsibility
Before diving into the checklist, it's crucial to understand your legal role. As a trustee, you are a fiduciary. This means you have a legal and ethical duty to act solely in the best interests of the trust's beneficiaries. Your primary responsibilities include:
Duty of Loyalty
You must put the beneficiaries' interests above your own.
Duty of Prudence
You must manage the trust's assets carefully and responsibly.
Duty of Impartiality
You cannot favor one beneficiary over another.
The trust document is your ultimate guide. Your job is to follow its instructions precisely.
The Mission Viejo Trust Administration Checklist ✅
Here is a step-by-step guide to help you navigate the trust administration process.
Phase 1: Getting Started (First 30-60 Days)
This is your instruction manual. Read it thoroughly to understand the assets, the beneficiaries, and the distribution plan.
You will need these for banks, financial institutions, and government agencies. You can typically get them from the Orange County Clerk-Recorder's office.
California law (Probate Code §16061.7) requires you to send a formal "Notification by Trustee" to all beneficiaries and legal heirs within 60 days. This notice informs them of the trust's existence and their right to request a copy.
The trust becomes a separate taxable entity upon the creator's death. You'll need an EIN from the IRS to open a bank account and file taxes for the trust.
Phase 2: Asset Management & Administration (Months 2-9)
Create a detailed list of all assets held by the trust—including real estate in Mission Viejo, bank accounts, investments, etc.—and determine their fair market value as of the date of death. You may need to hire professional appraisers for real estate or valuable collections.
Use trust funds to pay the decedent's final bills, taxes, and any ongoing administration costs (like legal fees, CPA fees, or property maintenance).
This is non-negotiable! Open a new bank account for the trust using the EIN and run all trust-related income and expenses through it. Keep every receipt and statement.
Phase 3: Accounting, Taxes, and Distribution (Months 9-12+)
You are responsible for filing the decedent's final 1040 personal income tax return and the trust's 1041 income tax return for each year the trust is active.
Beneficiaries are entitled to a detailed accounting of all financial transactions that occurred during the administration period. This report shows them exactly how you managed the trust's assets.
Once all debts and taxes are paid and the accounting is approved by the beneficiaries, you can distribute the remaining assets according to the trust's instructions. Always get a signed receipt from each beneficiary confirming they received their share.