Written Notice

• California law requires a trustee to issue written notice of administration upon a settler's death. Beneficiaries are granted 120 days from the date of receipt to contest the trust in probate court. Beneficiaries must visit the probate court where the trust is recorded to file a petition. If a beneficiary suspects fraud, he can petition the court to defer a trustee's power until the claims made against that person are proven false. California law requires a claimant to provide written notification of the court hearing to the parties involved in the trust.
  
  

Recovery of Trust Property

• Adminstering a trust includes identifying and collecting trust property. The trustee can hire a private asset search firm to recover undisclosed or missing trust property. California law permits a trustee to search a settler's home for trust account statements, insurance policies, dividend checks, income tax returns and other trust documents.
  
  

Liability for Trust Property

• To guard against theft, loss or damage, a trustee is permitted to remove personal property from a trust grantor's home and shelter it in a safe or a storage facility. In California, a trustee may be held liable for loss, theft or destroyed trust property.
  
  

Tax Returns

• A trust is a tax-paying entity required to file state and federal income tax returns. California law requires trustees to maintain a permanent record of all trust tax returns by date. The trustee must also categorize receipts and itemize profit and loss statements for every year the trust is in existence.
  
  

Distribution of Property

• While trust property remains under the charge of a trustee, she must make every effort to increase the trust's earning potential. This may include setting up interest-bearing trust accounts at local banks, mortgaging investment properties and selling stocks and bonds. Trust property should only be distributed with a focus on minimizing taxes for the beneficiary of the trust grantor.