Trustee’s Duty To Account During Trustor’s Incapacity

by KOHLER LEGACY LAW GROUP

January 19, 2024

While you are alive and well, in most cases you will act as the trustee of your own trust.  If you become incapacitated during your lifetime, your designated successor trustee will step in to manage the trust on your behalf.  Prior to 2023, California law provided that your successor trustee was only accountable to you during the period of your incapacity.  While this maintained your privacy, some believed it also created a lack of oversight.  In 2023, the law changed.  Now, under Probate Code Section 15800, if you become incapacitated, as determined by the method set forth in the trust or by a court, your successor trustee will owe duties to you and to the future beneficiaries who will inherit the trust assets following your death.

Under the new law, within 60 days of receiving information about your incapacity, your successor trustee must provide notice that Probate Code Section 15800 applies to the trust and a copy of the trust document (with amendments, if applicable) to the future beneficiaries.  Your successor trustee must also begin to report and provide written accountings to the future beneficiaries.

If you have a revocable living trust, this law will apply to the administration of your trust unless your trust specifically states otherwise.  We encourage you to reach out to us if you would like to discuss updating your trust to address the new law.

If you are currently acting as the successor trustee of a trust for an incapacitated trustor, please contact us for further advice regarding your new duties as trustee.  Failure to comply with the new law could be deemed a breach of your fiduciary duties to the beneficiaries of the trust.

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