San Francisco Bay Area Trust Lawyers: What Records Should I Keep as a Successor Trustee?

Stepping into the role of Successor Trustee after the incapacitation or death of a loved one is a big job that can feel scary and overwhelming for someone who has never served in such capacity. San Francisco Bay Area Trust lawyers understand that it can be equally unnerving to learn that the Trustee can be held liable for any mistakes or oversights that occur when administering the trust.

Because of the complexities of administering a trust and the liabilities that can come with the job, one of the most important habits for a Successor Trustee to develop is meticulous recordkeeping. Here are some practical steps that can make recordkeeping as a Trustee easier and offer protection if any disputes arise down the road:

Keep a Daily Journal of Activities

Get a notebook and begin recording all of your activities as Trustee. There’s no task too big or too small, including travel, meetings with beneficiaries, court appearances, going to the bank, meetings with contractors for a property repair, etc. It’s also a wise idea to jot down any legal or professional advice you received when conducting each specific duty (e.g., “I was instructed to take this action by my estate planning attorney”).

 Find a Safe Place to Store Legal Documents

The Trustee should store all correspondence and legal documents related to the Trust in a safe but easily accessible place. This includes the Trust document itself and any amendments or restatements. You will also want to keep any tax returns, bills of sale, or letters/emails with professionals related to the Trust in your files.

Maintain a Formal Accounting of the Trust

One of the most important duties a Successor Trustee has is to maintain a formal accounting of all Trust assets. This will require you to keep detailed inventories, appraisals, bank statements, receipts, checks, cancelled checks, ledgers, tax returns, and invoices so that you can easily show the beneficiaries how assets in the Trust are being managed or spent.

Keep Receipts for ALL Disbursements!

You should have receipts and a paper trail for all disbursements from the Trust. Payments from the Trust should always be made with a check and never with cash. It doesn’t matter if the service you are paying for is cheaper if you pay cash—you should decline and pay with a check anyway. You should also avoid accessing cash from the Trust using an ATM. This is for your protection, as the presumption for misappropriated funds always rests with the Trustee. Using checks provides a clear paper trail of where the money went.

Still Have Questions About Your Duties?

Always keep in mind that you don’t have to do this job alone! Most Successor Trustees will hire a lawyer to assist them with some of the more complex duties required and to help avoid legal liability from beneficiaries or other interested parties. If you have been named as a Successor Trustee and you have questions about what’s expected of you or you’d like help serving in this role, we invite you to contact our office at (650) 422-3313 to schedule a consultation with one of our San Francisco Bay Area Trust lawyers.