A trustee’s reference
California Trust Administration — Statutes & Definitions
Plain-English explanations of the California Probate Code provisions, federal tax rules, and case law that shape every trust administration in this state. Written for trustees, beneficiaries, and the people who advise them.
Most successor trustees arrive at this work without a legal background. The good news: the California Probate Code is more readable than most people expect, and the duties it imposes follow a sequence that’s possible to learn. This page collects the provisions a Bay Area trustee actually needs in plain English — what each one says, why it matters, and how it tends to come up in real administrations.
It’s a reference, not a substitute for counsel. Most of the issues below have edge cases that a written summary can’t handle. If you’re administering a trust and a particular question on this page sounds like yours, the right next step is a fifteen-minute call.
California Probate Code §16060
What is the trustee’s duty to keep beneficiaries informed under California law?
California Probate Code §16060 requires a trustee to keep the beneficiaries of the trust reasonably informed of the trust and its administration. The trustee doesn’t have to share every detail with every beneficiary — but they cannot keep beneficiaries in the dark about the existence of the trust, the administration’s status, or the beneficiaries’ rights under it.
In practice: Failure to keep beneficiaries informed is one of the most common grounds for a removal petition. Even a well-intentioned trustee who is overwhelmed and falls behind on communication can create the appearance of impropriety. Putting a simple update cadence in place from the beginning is the cheapest insurance you can buy.
California Probate Code §16061.7
What is the 60-day notice in California trust administration (Probate Code 16061.7)?
When a revocable trust becomes irrevocable on the death of a settlor — or when there’s a change of trustee on an irrevocable trust — the trustee must serve a formal notification on all beneficiaries and on the decedent’s heirs within sixty (60) days. The notification must identify the trust, the trustee, the principal place of administration, the address from which a copy of the trust can be requested, and a statutory warning about the time limit for contesting the trust. The warning must appear in 10-point boldface and use the specific language §16061.7 requires.
In practice: Missing the 60-day notice deadline doesn’t void the trust — but it dramatically extends the window during which a disappointed heir can challenge it. Once a complete and correctly-formatted notice is served, the recipients have only 120 days to bring a contest (or 60 days after they receive a copy of the trust, whichever is later). Without proper service, that clock never starts.
California Probate Code §16061.8
How long do beneficiaries have to contest a California trust?
California Probate Code §16061.8 sets the contest deadline at 120 days from the date the §16061.7 notification is served, or 60 days after the beneficiary receives a copy of the trust document, whichever is later. After that window, contest claims are barred.
In practice: This is why the 60-day notice matters so much: it starts the contest clock. A well-administered trust that has properly served notice can become uncontestable in as little as four months. A poorly-served notice — or no notice at all — leaves the trust vulnerable to challenge indefinitely.
Have a specific question about your situation? Fifteen minutes on the phone with Kelly is the fastest way to get a real answer. The call is free.
California Probate Code §§16062–16064
What is the trustee’s duty to account in California?
California Probate Code §§16062 and 16063 require trustees to maintain accurate records and to account to beneficiaries. The standard cadence is once a year, at the end of the trust’s accounting period, and on a change of trustee or termination of the trust. The accounting must show all receipts, all disbursements, the assets on hand at the beginning and end of the period, and the liabilities (if any). The trust document itself can waive the accounting requirement in certain circumstances, but not for current income or principal beneficiaries.
In practice: Many trustees underestimate how much record-keeping the accounting duty requires. Every check, every distribution, every payment — even small ones — needs to be documented as it happens. Reconstructing an accounting after the fact, from bank statements alone, is hard and expensive. Set up the bookkeeping at day one.
California Probate Code §16004
What is the trustee’s duty of loyalty in California?
California Probate Code §16004 imposes a duty of loyalty: the trustee must administer the trust solely in the interest of the beneficiaries. No self-dealing, no use of trust assets for the trustee’s own benefit, and no conflicting interests — unless the trust document specifically authorizes it or all beneficiaries consent after full disclosure.
In practice: The duty of loyalty doesn’t just bar the obvious self-dealing transactions. It also covers indirect benefits: hiring your own business to do work for the trust, buying a trust asset at a friendly price, charging trustee fees that aren’t reasonable. When in doubt, disclose the situation in writing and get beneficiary consent before acting.
California Probate Code §15681
How is a California trustee compensated?
Under California Probate Code §15681, a trustee is entitled to reasonable compensation for their services unless the trust document specifies otherwise. “Reasonable” is judged by the size of the trust, the complexity of the administration, the time spent, the trustee’s experience, and the going rate for similar work in the community. Family trustees often serve without taking compensation; professional trustees and trust companies typically charge a percentage of assets under administration.
In practice: If you’re a family member serving as trustee, you can elect to take fees or not — but you should document the decision either way and stick to it. If you start taking fees mid-administration, expect questions from co-beneficiaries. If you waive fees up front, you generally can’t claim them retroactively.
Internal Revenue Code §1014
What is the step-up in basis at death (IRC §1014)?
Under IRC §1014, most assets included in a decedent’s estate receive a new cost basis equal to their fair market value on the date of death (or on an alternate valuation date six months later, if elected). This “step-up” effectively erases unrealized capital gains accumulated during the decedent’s lifetime, so beneficiaries who later sell inherited assets generally pay capital gains tax only on appreciation that happened after the death.
In practice: Step-up in basis is one of the most powerful tax benefits in the U.S. tax code. It applies to most real estate, brokerage accounts, and business interests held in a revocable living trust at death — which is one of the reasons living trusts dominate California estate planning. Retirement accounts (401(k)s, IRAs) do not get a step-up and are taxed differently.
Have a specific question about your situation? Fifteen minutes on the phone with Kelly is the fastest way to get a real answer. The call is free.
California Constitution Article XIII A, §2.1 (Proposition 19)
What is Proposition 19 and how does it affect trust administration in California?
Proposition 19, which took effect February 16, 2021, dramatically narrowed the parent-child property tax exclusion for inherited real estate in California. When a child inherits a parent’s home through a trust, the property is reassessed to current fair market value unless the child moves in as their primary residence within one year and continues to use it as a principal residence. Even then, only the first $1 million of value above the original assessed value is excluded from reassessment.
In practice: Proposition 19 made California property a far more complicated inheritance than it used to be. Trustees need to file Change-in-Ownership statements with the county assessor and decide whether to claim any available exclusions. Doing this wrong — or missing the filing window — can result in a substantial property tax increase that follows the property forever. Get a real estate attorney involved early.
Estate of Heggstad (1993) 16 Cal.App.4th 943
What is a Heggstad petition?
A Heggstad petition is a court petition asking a judge to confirm that a specific asset belongs in a trust even though the settlor never formally retitled it into the trust during their lifetime. The petition relies on evidence (usually a schedule of assets attached to the trust, or a written intent to fund) that shows the settlor clearly intended the asset to be part of the trust. If granted, the petition transfers the asset into the trust without a full probate proceeding.
In practice: Heggstad petitions are one of the most useful tools in California trust administration. They can move a stray bank account, a real property, or a brokerage account into the trust — saving the family months of probate and thousands in court costs. Not every asset qualifies, but when one does, this is the path. Most California superior courts have streamlined procedures for these.
California Probate Code §6300
What is a pour-over will and why do most California trusts have one?
A pour-over will is a short will that names the trust as the beneficiary of any assets the decedent owned individually at death but that weren’t titled into the trust. When the will is admitted to probate, those assets “pour over” into the trust, where they’re then distributed according to the trust’s terms.
In practice: The pour-over will is a safety net, not a primary plan. The goal of a well-administered estate is to never need the pour-over — every asset should be titled into the trust during the settlor’s lifetime. But families forget to retitle one account, or open a new one after the trust was signed, or inherit something late in life that never made it to the trust. The pour-over catches those strays. Some of them may still need a Heggstad petition or a small-estate procedure to avoid full probate.
Where the page runs out
Where the textbook version of trust administration runs out.
A self-directed trustee can handle the simple administrations: a single home, a few accounts at one bank, three adult children who all get along, no business interests, no out-of-state property. The Probate Code rewards careful self-direction, and many estates close cleanly without an attorney ever getting involved.
The administrations that benefit most from an attorney are the ones where any of the following are true:
- An asset wasn’t titled into the trust during the settlor’s lifetime — a Heggstad petition or small-estate procedure is likely.
- Real property is involved, especially in more than one county or state.
- The estate is large enough that the federal estate tax exemption is in play.
- The family includes blended-family dynamics — stepchildren, prior spouses, children from multiple relationships.
- A beneficiary has special needs and requires a sub-trust that preserves public benefits.
- There’s a business interest the trust now owns and someone has to run, sell, or wind down.
- A potential contest is brewing — a disinherited child, a recent amendment, a capacity question.
- The trustee and a beneficiary are the same person, raising loyalty questions that need careful documentation.
- The 60-day notification window was missed, or notice was served incorrectly.
- The trust document itself is ambiguous, contradicts itself, or references provisions that don’t exist.
If any of these describe your situation, the cost-benefit calculus shifts. A two-hour conversation with an experienced attorney early in the administration is the cheapest insurance against the kind of problem that takes years and tens of thousands of dollars to unwind later. That’s what Kelly does.
Kelly Balamuth has practiced civil law in Contra Costa County for thirty-two consecutive years and has focused exclusively on trust and estate work since 2020. She handles trust administrations across the Greater Bay Area and throughout California, working directly with the trustees and beneficiaries — no junior associate routing.
A fifteen-minute call usually answers the question.
Bring your specific situation, your trust document, and your timing concerns. The call is free, and if Kelly can’t help, she’ll tell you who can.