Gabriel Katzner - March 17, 2021 - Asset Protection
Naming the Successor Trustee

When doing your estate planning, you may choose to have a revocable living trust as the foundation of your estate plan as opposed to a Last Will and Testament. A trust allows you to avoid probate, protect inheritances, and plan for when you can no longer manage your affairs. A revocable living trust is created during your lifetime, and you can change its terms at will. Here are the key roles in a trust:

  • Grantor (settler or trustor): The person who creates the trust decides how it will operate and what assets will be put in the trust.
  • Beneficiary: The person or charity who will benefit or receive property or money from the trust.
  • Trustee: The person who manages or invests the property or funds in the trust and distributes the assets to the beneficiaries by following the trust instructions.

You are almost always going to be the grantor, beneficiary, and the trustee of your revocable living trust throughout your lifetime. To prepare for a time when you may be incapable of managing your trust and for after you have died, you will need to name a successor trustee to manage your trust property and assets.

Who should be your successor trustee?

Your successor trustee typically acts without court supervision. This freedom saves on court costs, allows property distributions to occur more quickly, and maintains privacy. A lack of court supervision means that it will be up to your successor trustee to complete their responsibilities promptly. Since your successor trustee can do anything with your trust accounts and property that you could, as long as it does not conflict with the instructions in your trust documents or breach their fiduciary duties, it is essential to choose a successor trustee carefully.

Your successor trustee can be an adult child, family member, trusted friend, or professional or corporate trustee. If you choose an individual, name several back-ups in case your first choice is unwilling or unable to complete their duties.

When choosing a successor trustee, consider their:

  • Qualifications
  • Personality
  • Financial and business experience
  • Availability and other responsibilities

Ensure that your successor trustee is comfortable with the role, willing to take on the responsibility, and has the time to complete their duties. When writing your trust documents, make provisions for your trustee to be fairly paid for their work.

What rights and responsibilities come with this role?

If you should become incapacitated or die, your successor trustee will assume the role of trustee. Assuming the role of trustee means they will take full control over your trust. They can

  • Make financial decisions
  • Sell or refinance a property
  • Complete tasks related to the trust’s accounts and property
  • Pay bills
  • Inventory your accounts and property upon your death
  • Pay your final bills
  • Have your final tax returns prepared
  • Distribute your accounts and property to your beneficiaries as written in the trust instructions

If you become incapacitated, you will want to ensure that your trust funds are available to provide for your care. The trustee cannot control any property or accounts that are not in the trust. Therefore, if you do not move your properties, assets, and accounts into the fund, a process called funding your trust, they cannot be managed by the trustee.

Important Considerations

Since your successor trustee has full control over your trust, you need to name someone who will act responsibly with your trust assets, whose judgment you respect, who will honor your wishes, and will seek professional help as needed.

Trusts can become very complicated, especially if the accounts and property will not be fully distributed upon your death, but rather are held in trust.

Your successor trustee doesn’t need to know exactly what to do and when to do it, just whom to call for help and when. Your attorney can help guide your successor trustee. We can help you select, educate and advise your successor trustees. If you have questions or concerns, please schedule an appointment with us.

You can schedule a call with us or reach us directly at 855.528.9637 to learn more about how best to plan today to protect those most important to you.

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