When the person who created a revocable living trust dies or becomes incapacitated, the successor trustee steps in and takes on fiduciary duties enforceable in the Orphans' Court. Pennsylvania's Uniform Trust Act, codified at 20 Pa.C.S. Chapter 77, sets those duties out in detail. Sean Quinlan, Esq. guides trustees across Pennsylvania through the administration so the job gets done correctly and the trustee stays protected.
What the Pennsylvania Uniform Trust Act requires of you
A trustee must administer the trust in good faith, in accordance with its terms and purposes, and in the interests of the beneficiaries (20 Pa.C.S. § 7771). That is the master duty; everything else flows from it.
The duty of loyalty under 20 Pa.C.S. § 7772 prohibits self-dealing. A transaction between the trust and the trustee personally — buying trust real estate, lending trust money to yourself, hiring your own company — is voidable by a beneficiary regardless of whether the price was fair. The duty of impartiality under § 7773 requires you to balance income beneficiaries against remainder beneficiaries rather than favoring the ones you like.
You must keep trust property separate from your own and clearly labeled as trust property (20 Pa.C.S. § 7780). Commingling is the single most common way an otherwise honest trustee creates liability. You must also keep adequate records and use the care, skill, and caution of a prudent person, investing under the Prudent Investor Rule at 20 Pa.C.S. § 7203.
Funding and re-titling assets into the trust
A trust only controls what it owns. If the grantor signed the trust but never retitled the house, the brokerage account, or the LLC membership interest, those assets are still in the decedent's sole name and go through probate at the Register of Wills — which is exactly what the trust was bought to avoid.
During the grantor's lifetime, funding means deeding Pennsylvania real estate to the trustee, retitling non-retirement investment and bank accounts, assigning business interests, and reviewing beneficiary designations. Retirement accounts are generally not retitled; naming the trust as beneficiary of an IRA has significant income tax consequences and should be a deliberate decision, not a default.
After death, a successor trustee frequently inherits a partly funded trust. The fix is usually a pour-over will admitted to probate for the stray assets, with the probate estate then distributing into the trust. Identifying that gap early is one of the first things we do.
Notice to beneficiaries and accountings
Pennsylvania requires written notice of an irrevocable trust to current beneficiaries and to certain remainder beneficiaries within 30 days of the trust becoming irrevocable or of the trustee accepting the office (20 Pa.C.S. § 7780.3). The notice identifies the settlor, the trustee, and the beneficiary's right to request a copy of the trust and to receive information about administration.
The same section requires a trustee to keep current beneficiaries reasonably informed and to furnish an annual report of trust property, liabilities, receipts, disbursements, and trustee compensation on request. Skipping these notices is the most common trigger for a beneficiary petition.
Accountings can be informal — a written report circulated with a release and refunding agreement signed by beneficiaries — or formal, filed with and audited by the Orphans' Court. Informal accountings are cheaper and private. A formal accounting buys judicial discharge, which is worth the cost when beneficiaries are hostile, minors or unborn interests are involved, or the trustee wants certainty before distributing.
Trustee compensation in Pennsylvania
A trustee is entitled to reasonable compensation under 20 Pa.C.S. § 7768 when the trust does not set a fee. Pennsylvania has no statutory fee schedule for trustees; reasonableness is judged on the size of the trust, the complexity of the assets, the time spent, the skill required, and the results achieved.
In practice, corporate trustees in Pennsylvania commonly charge an annual fee of roughly 0.75% to 1.25% of assets under management, sloping down on larger trusts. Individual family trustees often take a smaller percentage, an hourly rate, or nothing at all — and family trustees frequently waive the fee because trustee compensation is taxable income to them while an inheritance from the same trust generally is not.
Whatever you take, document it contemporaneously and disclose it in your accounting. Undisclosed or after-the-fact compensation is a reliable way to invite a surcharge petition.
The mistakes that create trustee liability
Commingling trust funds with personal funds. Open a dedicated trust account with its own taxpayer identification number and run everything through it.
Self-dealing, even at a fair price — buying trust property, renting the trust's real estate to yourself, or paying your own business out of trust assets.
Missed tax filings. The trust generally needs its own EIN and a Form 1041 for each year it has income; Pennsylvania requires a PA-41 fiduciary return. Trust assets are also reportable on the Pennsylvania inheritance tax return (REV-1500) due nine months from the date of death, with a 5% discount for tax paid within three months.
Distributing early. Once you hand out the money you cannot get it back, and you remain personally exposed for unpaid taxes, creditor claims, and administration expenses. Hold a reserve and obtain releases first.
Favoring one branch of the family, ignoring the trust's actual distribution standard, or continuing to hold a concentrated stock position because 'Dad always owned it' — all three are breaches even when well intentioned.
When a trustee should hire counsel
The trust may pay reasonable legal fees incurred in administration, so hiring counsel is usually not a personal expense. Get help when the trust holds real estate or a closely held business, when beneficiaries disagree or have gone quiet, when the trust was never fully funded, when you are asked to interpret a discretionary distribution standard, or when a beneficiary requests a formal accounting.
Trust administration and probate frequently run in parallel — see our estate administration page for the assets outside the trust, and our revocable living trusts page if you are the one creating the plan rather than carrying it out.