You Just Became Trustee. Here’s What to Do in the First 90 Days.

Becoming a successor trustee is one of those moments people are rarely prepared for. A parent passes away. A successor trustee provision in a long-forgotten trust document names you. Suddenly you are responsible for someone else’s money, on behalf of beneficiaries who may have very strong opinions about what you should do with it. The first 90 days set the tone for everything that follows. Done well, they establish credibility with beneficiaries, build the documentary record you will need if anything is ever challenged, and protect you personally from the liability exposure trustees carry. Done poorly, they create problems that linger for years.

Days 1–30: Accept the Role, Secure the Assets, and Notify the Beneficiaries

Acceptance comes first. Under Texas Property Code section 112.085, you accept the trusteeship by signing the trust instrument, by signing a separate written acceptance, or by exercising powers or performing duties as trustee. Acceptance is consequential, it is the moment your fiduciary duties begin. Do not perform trustee acts informally before you have decided whether you are taking the role.

Read the trust instrument carefully and completely, more than once, before doing anything else. Identify the beneficiaries, the distribution standard (mandatory, discretionary, ascertainable, HEMS, and so on), the trustee’s powers, the trustee’s compensation, any successor trustee provisions, and any specific gifts or conditions.

Marshal and secure the assets. That means physically locating real property, obtaining keys and changing locks if appropriate, securing any tangible personal property of significant value, identifying and freezing existing financial accounts, and beginning the process of retitling assets into the trust’s name with the trustee identified. For real estate, secure insurance coverage that lists the trust as the insured.

Open a new trust bank account using the trust’s tax identification number. For a revocable trust that has just become irrevocable upon the settlor’s death, that means obtaining a new EIN, the trust no longer uses the settlor’s Social Security number. File Form SS-4 promptly.

Send the notification required by Texas Property Code section 113.151 and any specific notices required by the trust instrument or other applicable statutes. The statutory accounting framework gives a beneficiary the right to demand a written statement of accounts, and the practical reality is that beneficiaries who hear from you proactively are far easier to deal with than beneficiaries who feel ignored.

Days 31–60: Inventory, Value, and Assemble Your Professional Team

Build a complete inventory of trust assets with date-of-death values for any asset whose basis is being stepped up under section 1014. For publicly traded securities, the date-of-death valuation is a mechanical exercise. For real property, closely held business interests, partnership interests, and unique personal property, you need a qualified appraiser. Memorialize the values in a written inventory you will use as the baseline for every later accounting.

Engage your professional team. At minimum that usually includes a CPA familiar with fiduciary income tax, an attorney familiar with Texas trust law, and an investment advisor or trust officer if the trust holds significant marketable assets. If the trust holds operating business interests, real property, or other complex assets, the team expands accordingly.

Open a recordkeeping system that will let you produce a clean accounting on demand. The Texas Trust Code requires a trustee to keep beneficiaries reasonably informed; the recordkeeping that satisfies that duty also protects you.

Days 61–90: Investments, Distributions, and Tax Planning

Review the existing investment portfolio against the Texas prudent investor standards in Property Code section 117.004. The standard requires investments to be evaluated in the context of the trust portfolio as a whole and as part of an overall investment strategy having risk and return objectives reasonably suited to the trust. Document your investment policy in writing, even for a small trust, and have it reviewed by your investment advisor.

Establish a distribution policy consistent with the trust instrument’s standard. A discretionary trust with a HEMS standard requires a different framework than a trust with mandatory income distributions. Document the framework you will use to evaluate distribution requests, and apply it consistently. Inconsistent treatment of similarly situated beneficiaries is one of the most common sources of trustee liability.

Confirm the trust’s tax posture. Determine whether the trust is a simple trust, complex trust, or grantor trust for federal income tax purposes. Calendar Form 1041 deadlines and any state filings. Evaluate whether a section 645 election to treat the revocable trust as part of the estate is appropriate. Consider distribution timing decisions that affect distributable net income and the trust’s tax bracket relative to the beneficiaries’ brackets.

Why North Star Law Firm Approaches Trust Administration Differently

Trust administration sits at the intersection of state trust law, federal fiduciary income tax, and accounting fundamentals. My background as a JD/CPA who is a co-author of Trusted: The Essential Guide for Trustees gives Houston successor trustees an integrated resource for the legal, tax, and accounting questions that arise from day one. We offer trustee onboarding engagements on a flat-fee basis, designed to walk new trustees through the first 90 days with the right structures in place from the start.

Next Steps

If you have just been named successor trustee of a Texas trust and are not sure what to do next, North Star Law Firm offers trustee onboarding engagements on a flat-fee basis, structured around the first 90 days. For a more comprehensive treatment of the role, our book Trusted: The Essential Guide for Trustees is available on Amazon.

Flat Fees. No Hourly Billing. Payment Plans Available.

North Star Law Firm │ Houston, Texas

Phillip Zagotti, JD/CPA │ 832-686-2926

11740 Katy Freeway, Suite 1700, Houston, TX 77079

Frequently asked questions

When does my role as trustee actually begin?

Under Texas Property Code section 112.085, you accept the trusteeship by signing the trust instrument, by signing a separate written acceptance, or by exercising powers or performing duties as trustee. Acceptance is the moment your fiduciary duties begin. Do not perform trustee acts informally before deciding whether you are taking the role, once you act as trustee, you have accepted the role with all of the legal duties that go with it.

How quickly do I need to notify beneficiaries that I am the trustee?

Texas Property Code section 113.151 entitles a beneficiary to request a written statement of accounts. There is no specific statutory deadline for affirmative notification of trusteeship in Texas as broad as some other states impose, but the practical answer is to notify all beneficiaries within the first 30 days of accepting the role. The trust instrument may also impose specific notice requirements that should be honored on whatever schedule the document sets.

Do I need to get a new tax ID for the trust?

Yes, in most cases. A revocable trust that becomes irrevocable upon the settlor’s death needs its own EIN; it can no longer use the settlor’s Social Security number. File Form SS-4 with the IRS to obtain the EIN. An already-irrevocable trust that already had its own EIN continues to use it. The EIN is required to open a trust bank account, file Form 1041, and report income on K-1s to beneficiaries.

What does the Texas Trust Code require me to send to beneficiaries?

Texas Property Code section 113.151 entitles beneficiaries to a written statement of accounts upon request. The trustee is also subject to a general duty to keep beneficiaries reasonably informed about the administration of the trust. Many trust instruments impose additional requirements, annual accountings, specific notices upon distributions, notifications of trustee changes, and those instrument-specific requirements supplement the statutory floor.

How do I value trust assets at the date of death?

Publicly traded securities are valued at the mean of the high and low trading prices on the date of death, per Treasury regulation 20.2031-2. Real property, closely held business interests, partnership interests, and unique personal property require a qualified appraisal. The values matter for two reasons: the basis step-up under section 1014 for income tax purposes, and the inventory baseline against which all later accountings will be measured.

Can I act as trustee without hiring an attorney?

Legally, yes. Practically, almost never advisable. Trustee liability is real, the rules are technical, and the cost of professional help is usually small compared to the cost of getting it wrong. At a minimum, most successor trustees should engage an attorney for an initial review of the trust instrument and the first 90 days of administration, even if they intend to handle ongoing administration themselves.

What happens if I make a mistake as trustee?

Texas Property Code section 114.001 makes a trustee personally liable for breaches of duty, although the standard is generally negligence rather than strict liability. The trust instrument may modify the standard. Insurance is available for trustee errors and omissions. Honest mistakes, promptly corrected and disclosed to beneficiaries, are typically less consequential than concealed mistakes. The fact that you sought professional advice and acted in good faith reliance on it is usually a strong defense.