Trustee guide
No loose ends for the trustee.
Being a trustee is a fiduciary role — a legal duty to act in the beneficiaries' best interest, with documented care. This guide walks through what a successor trustee actually does, in the order they do it.
Phase 1
First 30 days — locate and verify
You are not authorized to act until the trust is properly invoked. Confirm your role before touching assets.
- Locate the original signed trust document and any amendments. Verify the most recent version controls.
- Confirm your appointment — check the successor trustee provisions. Are you sole or co-trustee?
- Request certified death certificates (typically 8–10) from the funeral director or county vital records.
- Sign a Certification of Trust (or Affidavit of Successor Trustee, state-dependent). This is what banks need — not the full trust.
- Obtain a federal EIN for the trust at irs.gov/ein. The trust now files its own tax returns.
- Engage an estate planning attorney licensed in the grantor's state of domicile — even if you plan to self-administer.
- Engage a CPA familiar with trust returns (Form 1041) and the grantor's prior personal returns.
- Notify the post office, get the mail forwarded to a trustee-controlled address.
- Secure the residence — change locks, secure firearms, jewelry, vehicles, and irreplaceable documents.
Phase 2
Inventory — find what the trust owns
You can only distribute what you can find. Build a complete asset and liability inventory before doing anything else.
- Pull the last 3 years of tax returns — they list interest, dividends, and rental income (= accounts and properties).
- Pull the last 3 months of mail and email — bills, statements, brokerage notices.
- Pull credit reports from all three bureaus (and add a death flag) — surfaces forgotten accounts and prevents identity theft.
- Locate real estate records: deeds, mortgage statements, county property tax bills, homeowner insurance policies.
- Locate financial accounts: bank, brokerage, retirement, HSA, 529, credit unions, online-only banks.
- Locate insurance: life, annuity, long-term care, umbrella, auto, homeowner.
- Locate business interests: operating agreements, share certificates, partnership documents.
- Locate digital assets: password manager, crypto wallets, domain names, cloud storage, social media.
- List all liabilities: mortgages, credit cards, medical bills, taxes owed, judgments, alimony arrearages.
- Determine which assets are titled in the trust vs. outside it (the latter may need probate via the pour-over will).
Phase 3
Notice — communicate with beneficiaries and creditors
State law usually requires written notice to beneficiaries within a specific window (often 60 days). Track every communication.
- Send statutory trustee notice to all beneficiaries — your attorney provides the template required in your state.
- Send a copy of the trust to anyone entitled to it (usually current and remainder beneficiaries).
- Notify Social Security of the death (often the funeral director does this automatically).
- Notify pension plans, VA, military, and any state benefits offices.
- Notify financial institutions, credit cards, utilities, subscriptions, and recurring charges.
- Publish a notice to creditors in the local newspaper if state law allows shortened claim periods.
- Open a trustee's file — every letter, email, and call gets logged with date, person, and substance.
- Set up secure communication with beneficiaries — many disputes start from poor communication, not from money.
Phase 4
Collect and protect — assets into trust control
Move everything under trust control, value it as of date of death, and protect it from loss or claims.
- Open a trust checking account using the EIN and Certification of Trust.
- Transfer cash balances from the grantor's personal accounts into the trust account.
- Get date-of-death valuations: real estate appraisal, brokerage statements, business valuation if applicable.
- Preserve real property: maintain insurance, pay property taxes, keep utilities on if the home is being sold.
- Sell, hold, or distribute investments per the trust terms and prudent investor rule.
- Collect life insurance proceeds — file claims with each carrier using death certificates.
- Roll over or claim retirement accounts per beneficiary designations (these usually pass outside the trust).
- Continue or wind down business operations per the trust's direction and the operating agreement.
- Document the inventory and valuations — this is the starting point for the trust accounting.
Phase 5
Pay debts, taxes, and expenses
Creditors are paid before beneficiaries. Trustees who distribute too early can be personally liable for unpaid debts and taxes.
- Review all claims against the estate — legitimate ones get paid, questionable ones get challenged.
- Pay funeral expenses, last medical bills, and ongoing residence costs from the trust account.
- File the grantor's final personal income tax return (Form 1040) for the year of death.
- File a federal estate tax return (Form 706) if the estate exceeds the federal exemption — even partially, for portability.
- File any state estate or inheritance tax returns in the grantor's state and in every state where they owned property.
- File the trust's annual income tax return (Form 1041) every year the trust generates income.
- Pay attorney, CPA, appraiser, and trustee fees from the trust — keep itemized invoices.
- Do not distribute to beneficiaries until you are confident all debts and taxes are covered. Hold a reserve.
Phase 6
Distribute — to beneficiaries, per the trust
Follow the trust's instructions exactly. Document everything. Get receipts.
- Read the distribution provisions slowly — outright, staged, discretionary, or held in further trust?
- Identify each beneficiary's share and any special conditions (age requirements, education clauses, HEMS standards).
- Distribute specific gifts (named items, dollar amounts) before residuary shares.
- For staged distributions, set calendar reminders — many last for years or decades.
- For minor beneficiaries, distribute to a custodian (UTMA) or hold in trust — never directly to a minor.
- For special-needs beneficiaries, distribute to the special-needs sub-trust, not the individual.
- Send each beneficiary a receipt-and-release to sign acknowledging their distribution.
- Re-title real estate or vehicles into beneficiary names if distributed in-kind.
- Issue K-1 forms to beneficiaries for any income distributed during the year.
Phase 7
Account and close
Give beneficiaries a final accounting. Get their approval. Close trust accounts. Keep records for years.
- Prepare a final trust accounting: starting inventory + income + gains − expenses − distributions = ending balance (should be zero).
- Send the final accounting to every current and remainder beneficiary.
- Request a receipt-and-release-and-refunding agreement from each beneficiary.
- If a beneficiary refuses to approve, the alternative is a court-supervised final accounting (judicial settlement).
- File the final Form 1041 marked "Final Return."
- Close the trust EIN with the IRS once final returns are filed.
- Close the trust bank account.
- Retain all trust records, receipts, tax returns, and beneficiary releases for at least 7 years — longer if any disputes are open.
Ongoing
Long-running trusts
Some trusts continue for years or generations. Trustee duties are continuous, not one-time.
- Annual accounting to current beneficiaries — even if not required, it heads off disputes.
- Annual trust income tax return (Form 1041) and K-1s to beneficiaries who received distributions.
- Annual investment review with prudent-investor standard — diversification, risk, and beneficiary needs.
- Annual fiduciary insurance review — protect yourself against errors and omissions claims.
- Triggered distributions on schedule (age 25, 30, marriage, education milestones — whatever the trust says).
- Successor trustee succession — keep your own backup plan in case you resign, become incapacitated, or die.
- Periodic legal review — laws change. Some trusts allow decanting or judicial modification.
Fiduciary duties — read first
Every action you take as trustee is measured against these duties. Violating them creates personal liability — even if you meant well.
- Duty of loyaltyAct solely in the beneficiaries' interest. No self-dealing, no conflicts, no insider transactions.
- Duty of prudenceManage trust assets with the care, skill, and caution a prudent person would use — diversify, don't speculate.
- Duty of impartialityTreat current and remainder beneficiaries fairly. Don't favor one over the other.
- Duty to inform and accountKeep beneficiaries reasonably informed. Provide accountings on request and at major milestones.
- Duty to administer per termsFollow the trust document exactly. Deviating requires court approval or unanimous beneficiary consent.
- Duty to separate trust propertyNever commingle trust funds with your own. Separate accounts, separate records.
- Duty to act personallyYou can hire help (attorney, CPA, advisor) but you cannot delegate the decision-making.
- Duty of confidentialityTrust information is private. Share only with beneficiaries entitled to it and professionals who need it.