Wednesday, 19 November 2014 10:15
Part Two of Three
In Part One of this series we discussed the initial duties of the successor trustee (manager) of a trust when the person who created the trust passes away. In summary, the successor trustee is to lodge the will, if any, with the court, send a formal notice of the trust administration to the trust beneficiaries and deceased person's next of kin, and file appropriate documents with the County Recorder's office if real property is involved. This article addresses the second phase in the overall responsibilities of the successor trustee, that of gathering the assets and settling any of the deceased person's debts.
The successor trustee has a duty to inventory the decedent's assets and take reasonable actions to pursue money that may be owned by, or owed to, the trust. Cash in financial institutions (checking and savings accounts, CDs, money markets, etc.) and lump sum payments for life insurance policies, retirement plans and annuities should be collected from the various institutions and aggregated into a trust account. The trust account must be opened under a new tax identification number obtained from the IRS because once a person is deceased his or her social security number can no longer be used. The successor trustee cannot use his or her own social security number or put the money into his or her own bank account either because that would be a violation of a cardinal rule: the successor trustee must keep trust property separate from his or her own property.
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