Trustee’s Notice: The First Thing A Successor Trustee Should Do After The Death Or Incapacity Of The Initial Trustee
After the initial trustee passes away, or becomes irrevocable, what must the trustee do? When a trust becomes irrevocable, it means that the trustor can no longer change or terminate the trust. As a result, the trustee of the irrevocable trust is responsible for managing the trust’s assets.
In California, a trustee must follow specific rules and regulations when administering an irrevocable trust. The first thing a trustee must do is send out a Trustee’s Notice.
Who Needs To Be Notified?
A revocable trust becomes irrevocable by reason of the death of one or more of the settlors, or when there is a change of trustee of an irrevocable trust, the trustee must give notice as provided in that section to each beneficiary of the trust. Also, if the notification is required because of the death of a settlor, notice must be given to the heirs of the settlor.
What Does The Notification Need To Say?
The notice must be specific and contain the following:
To begin with, the law requires it. In addition, this is a great way to limit the time in which an heir or beneficiary can challenge a trust. This is quite critical information, and will affect the timing of distributions.
The notice shortens the statute of limitations for bringing an action to contest the trust to the later of 120 days from the date of notification or 60 days from the time the trust instrument is mailed or delivered during that 120-day period
When Does The Notice Need to Be Sent?
The successor trustee has 60 days after the death of the initial trustee to give notice.
Are you a successor trustee? Contact my office to set up a free consultation to discuss this notice, and other aspects of being a trustee. Let’s come up with a plan! 818-248-2183. Or email me via the below.
AB Trust: What You Need to Know
Trusts are an important tool for financial and estate planning. AB Trusts are a particular kind of trust. They are often used when a couple wants to control the distribution of their assets after the death of the first spouse to die.
This guide will explain the basics of AB trusts, how they work, and the benefits they offer.
What is an AB Trust?An AB Trust is a type of trust that allows the spouses/grantors to split the trust into two separate parts after the death of the first spouse. These two parts are known as Trust A and Trust B.
The surviving spouse’s assets are transferred to Trust A (usually called the Surviving Spouse’s Trust); while the decedent spouse’s assets are transferred to an irrevocable bypass trust. The surviving spouse then has access to income produced by assets in the Bypass Trust, and potentially some income.
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