Victorville, CA asked in Estate Planning and Probate for California

Q: Why would Trustee wait for letters from probate court to distribute nonprobate assets that he already sold or cashed in?

Grandmother had a revocable living trust that became irrevocable upon her death. In her trust the section about distributions states after payment of last expenses and taxes the remaining trust principal is to be distributed outright 100%. She has a pour-over will and 2 small accounts of hers had to be probated. The successor trustee sold or liquidated everything else almost two years ago. He says he's waiting for the letters testamentary from the court to distribute everything. He told me right after she died that he would be able to distribute the trust assets sooner than the probate assets. He's already filed taxes for the trust, Every time I ask him for an update he only says "Soon" or "he's waiting for a signature" and then blames the courts for delays but it's him delaying filings. Is it normal to withhold nonprobate assets until probate is completed?

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2 Lawyer Answers
Howard E. Kane
PREMIUM
Howard E. Kane
Answered
  • Estate Planning Lawyer
  • Oakland, CA
  • Licensed in California

A: I agree that the timeline for distributing trust assets is too long. Does the successor trustee have an attorney? If so, I would press the attorney for answers. If this gets stalled out much longer, you can hire an attorney to put some kind of pressure on the trustee to get this wrapped up. In addition, an attorney can file a Petition with the probate court requesting an accounting, other action, and information.

Regarding probate bank accounts, if they are small enough, then those accounts can pass through probate through an expedited petition designed for small accounts. They can also possibly be settled directly with the bank through an Affidavit process.

Julie King
Julie King
Answered
  • Estate Planning Lawyer
  • Monterey, CA
  • Licensed in California

A: Normally, if all debts and taxes have already been paid, most of the trust assets are distributed before the two year mark. Many trustees will hold back some funds for stray bills that show up out of the blue, so trustees don't always distribute the entire trust estate. In your case, if the only reason the trustee is waiting to distribute any trust assets is because he wants the assets outside the trust (i.e., those subject to probate) to be distributed at the same time as those assets in the trust, then it sounds like he is not following the terms of the trust. Or he may just be lazy and want to send everything at once. Either way, you should send him a letter in writing and tell him to distribute the assets in accordance with the terms of the trust. If he won't do that, hire a lawyer to help you.

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