10 Important Steps for Terminating an Orange County Trust

Over the course of the past months or years, you have successfully managed the trust assets, kept accurate financial records, and filed necessary tax returns. What happens when it is time to distribute all of the remaining assets and close down the living trust? There are several important steps that you must follow in order to ensure that the Orange County trust termination is handled properly. The following is an overview of these crucial tasks that lay before you:

  1. Provide the beneficiaries of the trust with an accounting at the time of termination of the Orange County trust.
  2. Include specific details in the accounting as outlined in the California Probate Code. You may wish to include the time and expense of preparing this detailed documentation as part of the accounting.
  3. In the alternative, consider obtaining a written waiver from each of the beneficiaries instead of preparing a formal accounting. You will still have to provide certain financial information to the beneficiaries, however.
  4. Distribute the assets in accordance with the terms of the living trust. 
  5. Obtain receipts from each beneficiary, verifying that they received their full distribution.
  6. Consider retaining a small amount of cash as a reserve fund to cover any final expenses that may arise. An example would be tax return preparation fees for the final tax year of the trust. Any amounts held in the reserve should be listed on the accounting or financial report.
  7. Arrange for storage of trust records for a specific period. Your attorney can help you decide what is a reasonable timeframe for storing these documents.
  8. Ensure that all tax returns have been filed and paid.
  9. Provide the beneficiaries with proper notice of the termination.
  10. Consider using a Trust Distribution and Termination Agreement to prevent future disputes.

If the administration of your trust is subject to the supervision of the probate court, there may be additional steps required to terminate a California trust.

To learn more about the trust administration process, view our free guide, Understanding the Revocable Living Trust - In Language that Anyone Can Understand in 8 Minutes. If you need assistance serving as trustee, contact an experienced Orange County trust administration lawyer today. Call our office at (714) 459 -5481 for a consultation.

James F. Roberts
Founder and owner of the Law Office of James F. Roberts and Associates, a premiere estate planning law firm