Legal Question in Wills and Trusts in California

As the trustee, you owe a high fiduciary duty to the other beneficiaries to carry out the intent of the trust. The trust must pay your mother's final bills and pay any creditors, including the IRS. If there is more than enough cash on hand, then there can be a partial distribution to beneficiaries whild you are still figuring out who needs to be paid. It seems that the $65,000 was intended to be used in this fashion and distributed equally among the siblings. I strongly advise you to retain an attorney to make sure that creditor's notices and beneficiary notices are properly sent as that can cut off liability down the road.

There is an additional, though in the current economy small, issue. Your facts state that you withdrew the monies while acting in your capacity as trustee, however you commingled the money in a checking account in your own name. Your duty to protect trust assets includes interest earned on same assets. I agree with Mr. Feldman, you should obtain an attorney's assistance and produce an accounting for the monies withdrawn and very importantly, the disposition of any interest earned on the $65,000.

A meeting with a competent attorney, where he can review the will, document your actions, produce an accurate accounting, and assist you in proceeding under the terms of the trust will be very prudent regarding your situation.

As trustee of your Mother's trust you may have some obligations with respect to the IRS/FTB including filing her final income tax returns and/or dealing with other issues. There could, for example, be taxes due in connection with the sale of her home. You need to be sure that those type of issues are taken care of before making any distributions to the beneficiaries. As trustee you must also be sure to keep any of her money separate from your own funds. The $65,000 that you are holding, for example, should be in an account in the name of the Trust and you need to be able to account for any monies spent from that account.

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