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Alabama Trust Administration Guide
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Alabama Trust Administration Guide

Successor trustee duties after a death under the Alabama Uniform Trust Code (Title 19, Chapter 3B): the 60-day beneficiary notice, debts, taxes, distribution.

By Settled Editorial

Alabama trust administration is the work a successor trustee does after the person who created a revocable living trust dies. If you were named to step in, you now hold the trust property, you pay the final debts and taxes, and you hand out what is left to the beneficiaries the way the trust document says. Most of this happens outside Probate Court, which is the main reason families set up a revocable living trust in Alabama in the first place.

This guide walks through each step in order: accepting the job, sending the required beneficiary notice, gathering and valuing assets, paying debts and taxes, keeping beneficiaries informed, and making distributions. Alabama trusts run under the Alabama Uniform Trust Code, Ala. Code Title 19, Chapter 3B, and the section numbers below all come from that chapter.

What a Successor Trustee Does in Alabama

Here is the short version of the job. As the successor trustee, you:

  1. Accept the trusteeship and read the full trust document plus any amendments.
  2. Secure the trust property, order death certificates, and get an EIN for the trust.
  3. Send the beneficiary notice the Alabama Uniform Trust Code requires within 60 days.
  4. Identify, gather, and value the trust assets.
  5. Pay valid debts, expenses, and taxes before anyone gets a distribution.
  6. Keep beneficiaries reasonably informed and send a report.
  7. Distribute the remaining property under the trust terms and close the trust.

The rest of this guide takes each step one at a time.

Step 1: Accept the Trusteeship

You are not a trustee until you accept the role. Under Ala. Code § 19-3B-701, a person named as trustee accepts by substantially complying with the method the trust sets out, or by accepting delivery of trust property, exercising powers, or otherwise acting as trustee. If you do not want the job, you can decline, but do it before you start acting.

Once you accept, Ala. Code § 19-3B-801 says you must administer the trust in good faith, in line with its terms and purposes, and in the interests of the beneficiaries. Read the entire document first. Note who the beneficiaries are, what each one receives, whether any distributions have conditions, whether the trust pays you, and whether another successor trustee follows you.

Step 2: Secure Assets and Get Organized

Before you can hand anything out, you have to take control of the property and protect it.

  • Order certified death certificates. Get 10 to 15 copies. Banks, title companies, and transfer agents each want their own.
  • Secure the property. Lock up the home if the settlor lived alone, protect valuables, keep insurance in force, and redirect mail.
  • Get a trust EIN. After the settlor dies, the trust becomes its own taxpayer and can no longer use the settlor's Social Security number. Apply for a free Employer Identification Number through the IRS.
  • Open a trust bank account. Run every trust transaction through one account in the trust's name. Mixing trust money with your own breaks the duty to keep trust property separate under Ala. Code § 19-3B-810.

Keeping clean records from day one is not busywork. The same section requires you to keep adequate records and to keep trust property separate from your own, and those records are your best defense if a beneficiary questions a decision later.

Step 3: Notify the Beneficiaries

This is the step with a hard deadline, so do not skip it.

Ala. Code § 19-3B-813 sets the duty to inform and report. Within 60 days after accepting a trusteeship, you must notify the qualified beneficiaries of your acceptance and give them your name, address, and telephone number. You must also keep the current beneficiaries reasonably informed about the administration and the facts they need to protect their interests, and respond promptly to a beneficiary's reasonable request for information unless that would be unreasonable.

The same section requires you to send the beneficiaries a report, at least annually and when the trust ends, listing the trust property, liabilities, receipts, and disbursements, the source and amount of your compensation, and a list of the trust assets with their market values when feasible. A beneficiary can waive the right to a report in writing and can later withdraw that waiver.

Send the notice in writing, keep a dated copy, and keep proof of mailing. A clean paper trail here heads off most disputes before they start.

Step 4: Gather and Value the Trust Assets

Now build a full inventory of what the trust owns. Ala. Code § 19-3B-816 gives the trustee the power to collect trust property and to act on it. Track down and list:

  • Real estate, with a date-of-death appraisal for each parcel
  • Bank accounts, CDs, and money market accounts
  • Brokerage and investment accounts
  • Retirement accounts and life insurance payable to the trust
  • Business interests
  • Vehicles, jewelry, and other personal property

Get professional appraisals for real estate, business interests, and high-value items. Date-of-death values matter for taxes and for splitting property fairly among beneficiaries.

Watch for assets the settlor never moved into the trust. Anything still titled in the settlor's own name is not trust property, and it may have to pass through Alabama probate before it can reach the trust. A pour-over will catches those stray assets and routes them to the trust, but they go through probate first. The Alabama will requirements guide explains how that will has to be signed and witnessed to be valid.

Manage Assets Prudently While You Hold Them

You may hold assets for months while you settle the trust. During that time you owe a duty to invest and manage them with care. Under Ala. Code § 19-3B-901, a trustee who invests and manages trust assets must follow the prudent investor rule. Ala. Code § 19-3B-902 says you must invest and manage as a prudent investor would, weighing the purposes, terms, and circumstances of the trust, and exercising reasonable care, skill, and caution. You do not have to be a market expert. You do have to act carefully and get help for anything complex.

Step 5: Pay Debts, Expenses, and Taxes

Pay the trust's valid obligations before you distribute anything. This protects the beneficiaries and protects you.

Debts and expenses. Pay the settlor's legitimate final bills and the costs of running the trust from trust funds. If you are unsure whether a claim is valid or whether the trust can cover everything, hold a reserve and get advice before you pay out. The Alabama creditor claims guide explains how debts work when an estate is involved.

The settlor's final income tax return. File the settlor's last personal return, Form 1040, covering January 1 through the date of death.

The trust's income tax returns. After the settlor dies, the trust is a separate taxpayer. File federal Form 1041 for the trust's income, and issue Schedule K-1 forms to beneficiaries for income paid out to them. Alabama also taxes trust income on the Form 41 Fiduciary Income Tax Return, and a complete copy of the federal Form 1041 must be attached.

Estate and inheritance tax. Alabama has no state estate tax and no state inheritance tax for deaths after 2004, per the Alabama Department of Revenue. Federal estate tax reaches only very large estates, so most Alabama families owe none. A CPA who handles trust returns is worth the cost on anything beyond a few simple accounts.

Distributing assets before debts and taxes are handled can leave you personally on the hook for the shortfall, so this step comes before any payout.

Step 6: Keep Beneficiaries Informed and Account

Your duty to communicate does not end with the first notice. Ala. Code § 19-3B-813 requires ongoing reports and prompt answers to reasonable requests, as covered above.

Several other duties run alongside it. Under Ala. Code § 19-3B-802, you must act solely in the interests of the beneficiaries, which rules out self-dealing. Under Ala. Code § 19-3B-803, if the trust has two or more beneficiaries, you must treat them impartially. And Ala. Code § 19-3B-804 requires you to administer the trust as a prudent person would, using reasonable care, skill, and caution.

Document every decision and the reason behind it. Send beneficiaries periodic updates, not just the bare statutory minimum, because most fights start when people feel left in the dark.

Step 7: Distribute the Trust Property and Close

Once debts, expenses, and taxes are handled, you distribute what is left under the trust terms.

  • Specific gifts come first. Pay out the named items or dollar amounts the trust lists.
  • Then the residue. Whatever remains goes to the residuary beneficiaries in the shares the trust sets.
  • Continuing trusts. If the trust creates a sub-trust, such as one for a minor child, you may keep managing that share rather than paying it out.

Get a signed receipt from each beneficiary for what they receive. To close the trust cleanly, Ala. Code § 19-3B-817 lets you send beneficiaries a proposal for distribution. A beneficiary who does not object within 30 days after the proposal is sent loses the right to object, but only if the proposal told them about that right and the time limit. Send a final report with the proposal so everyone can see the full picture before the trust ends.

Trustee Pay, Removal, and Liability

Compensation. If the trust document does not set your fee, Ala. Code § 19-3B-708 entitles you to compensation that is reasonable under the circumstances. Many family trustees waive the fee to leave more for the beneficiaries, but you are not required to.

Removal. A settlor, a co-trustee, or a beneficiary can ask a court to remove a trustee under Ala. Code § 19-3B-706, for reasons such as a serious breach of trust, an inability to cooperate among co-trustees, or unfitness. This is one more reason to communicate and keep records.

Liability. A trustee who breaches the trust can be held responsible for the loss. Ala. Code § 19-3B-1002 sets the damages for a breach, which can include the lost value plus profits the trust would have earned. The way to protect yourself is to follow the trust terms, pay debts before distributing, keep good records, and ask a professional when a decision is not clear.

How This Fits Into Your Estate Plan

Trust administration is the back half of a plan that someone set up years earlier. The front half is the documents themselves. A revocable living trust holds and passes property, but it cannot make medical or financial decisions for the settlor while they were alive. A full Alabama plan pairs the trust with:

  • A durable power of attorney, so a trusted person can manage assets outside the trust. See the Alabama power of attorney guide.
  • An advance directive for healthcare wishes.
  • A pour-over will to catch assets that never made it into the trust.

If you are weighing whether a trust or a plain will fits your own situation, the national will vs. trust comparison lays out the trade-offs side by side. And if you are settling a trust now, the Alabama revocable living trust guide explains how the trust was meant to work in the first place.

The Bottom Line

A successor trustee in Alabama follows a clear path: accept the role, secure the property, send the 60-day beneficiary notice required by the Alabama Uniform Trust Code, gather and value the assets, pay debts and taxes, keep beneficiaries informed, then distribute and close. The deadlines that matter most are the 60-day acceptance notice under Ala. Code § 19-3B-813 and the 30-day objection window on a distribution proposal under Ala. Code § 19-3B-817. Move in order, keep records of every step, pay obligations before anyone gets paid, and bring in an Alabama trust attorney or CPA for real estate transfers, tax returns, or anything contested.

Official Sources

Sources

This guide is general information, not legal advice. Consult a qualified attorney about your situation. It is not legal advice.

Information current as of June 19, 2026

This content is for informational purposes only and does not constitute legal advice. Probate laws and procedures in Alabama can change. Consult with a qualified attorney for advice specific to your situation. Full disclaimer.

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