Duties of a Surviving Spouse Trustee
Following the Death of the First Spouse (Simple Trusts)
- Review Trust & Will in detail.
- Make funeral arrangements for deceased spouse. Order death certificates.
- If deceased was receiving income from Social Security, you must notify Social
Security. A surviving spouse is normally eligible for a lump-sum death benefit and continued Social Security income.
- If deceased was receiving income from PERS, STRS, or some other pension fund, notify them of the recipient's death and determine what benefits may continue for the life of the surviving spouse. There may be some small death benefit payable.
Surviving spouses of disabled veterans also may be eligible for benefits.
- Determine what, if any, income will be coming to the surviving spouse. Note that the surviving spouse may lose some income from Social Security or the spouse’s pension, so it is important to know what the future income stream will be.
- Identify any life insurance policies, annuities, pension plans, or other assets that have designated beneficiaries. Submit claims for benefits as appropriate or notify named beneficiaries of their right to submit claims. If the surviving spouse is the designated beneficiary of the deceased’s IRA, consider a rollover to an account for the surviving spouse. If the deceased was taking required minimum distributions and their distribution for the year in which they died had not yet been taken, BE SURE TO HAVE THE DESIGNATED BENEFICIARY TAKE THIS DISTRIBUTION BEFORE THE END OF THAT SAME YEAR – failure to do this can result in a substantial penalty.
- File decedent’s original Will with the Superior Court in county where he/she lived.
- Determine what assets are on hand and the nature and location of those assets (cash, bank accounts, securities, real estate, vehicles, etc.).
- Notify banks and other financial institutions of the death of spouse/trustee. These accounts may need to be changed over to the surviving spouse's Social Security number.
- Establish date-of-death values for all trust securities (stocks, bonds, mutual funds, etc.) by contacting the brokerage firm or financial institution that holds the account(s). Get these date-of-death values in writing. These values will affect the cost basis for the surviving spouse or other heirs. The deceased spouse’s name should be taken off the accounts. Make sure that the accounts are under survivor’s Social Security number.
- If necessary, review investment portfolio with advisors to determine whether any immediate actions are necessary or advisable.
- Retain advisors as needed (attorney, CPA, investment advisor, appraisers, etc.).
- Obtain written appraisals for any real estate held in the trust to establish new cost basis. (Appraisal should be for fair market value as of the date of death.)
- Record an Affidavit of Death of Trustee (together with an original certified death
certificate) for each parcel of real property held in the trust.
- For each California property, prepare a Death of Real Property Owner form and a
Preliminary Change of Ownership Report and file these with the County Assessor in the county where the property is located within 150 days of the date of death.
- Identify, locate, and value all non-trust assets (if any), including safe deposit boxes.
- If there are non-trust assets in the deceased spouse’s name alone and no designated beneficiary, determine what must be done to re-title such assets.
- Cancel auto insurance coverage on deceased spouse if he or she was still covered.
- Verify and pay valid debts of the deceased spouse; cancel individually issued credit
cards and close accounts that were in the deceased spouse’s name alone.
- After all covered medical expense claims have been paid, arrange to cancel any
existing medical insurance policies. If deceased spouse was covered by Medicare (and any supplemental health policy), allow two to three months for the medical bills to be processed as insured claims – don’t pay medical bills for at least 2 months.
- If deceased was receiving benefits from Medi-Cal, you must notify the Director of Health Services in Sacramento and submit a certified copy of the death certificate. The DHS has four months to notify you of any claim against the estate.
- If necessary, set up a tickler file/system to note important dates: income and estate tax return due dates, property tax due dates, CD maturities, etc.
- Arrange for the preparation and filing of the final income tax returns for both spouses by the due date (the surviving spouse can file a joint return for the full year in the year of the other spouse's death).
- If the total value of all trust and non-trust assets (including pension plans and life
insurance proceeds) owned by the deceased spouse approaches or exceeds $3,500,000*, list all assets and their values and meet with an accountant who can prepare the estate tax return (Form 706). The due date for the estate tax return is 9 months after the date of the first spouse's death, or by the extension date if an extension is filed. If a 706 is necessary, obtain a federal tax identification number (FEIN) for the estate using IRS form SS-4 (your attorney or accountant will do this).
* 2009 estate tax exemption amount; this may change if a new tax law is passed.
- If called for, distribute personal property as per trust directions; distribute specific bequests of cash or assets per trust directions if any distributions are to be made following the first spouse’s death.
- The surviving spouse may need to update beneficiary designations on IRAs or other
retirement accounts, life insurance, annuities, U.S. Savings Bonds, etc.
- The surviving spouse may need to update his/her will, power of attorney, and advance health care directive.
- Continue the administration of trust in accordance with trust directions. If the trust is revocable by the surviving spouse, then there are no required disclosures or accountings to remainder beneficiaries, no separate tax returns to file for the trust, and no restrictions on how the surviving spouse manages the trust investments.
- If the trust becomes irrevocable at the first spouse's death, there will be annual trust tax returns (forms 1041 and 541) that must be prepared and filed, and appropriate accounting records must be maintained. Notify beneficiaries and heirs as required under Probate Code §16061.7, and provide a copy of the trust to any of these people who ask for it. Beneficiaries are legally entitled to accountings and may inquire as to the status of trust assets/investments. The trustee has a legal duty to keep the other beneficiaries properly informed.