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Successor TrusteeIf you have created a revocable living trust, chances are you named yourself as the initial trustee.   This helps you continue to manage your assets as if nothing had changed.   However, if you are ever incapacitated or after you have passed, someone will have to step into your shoes and manage your assets.   This Successor Trustee is one of the most important appointments you will make in your estate plan.

The Key Takeaways:

  • You need to choose your successor trustee carefully because of their responsibilities.
  • You can name your adult children, relatives, friends, or even a professional to be your successor trustee.

Responsibilities of A Successor Trustee

At Incapacity:

If you are ever incapacitated, your trustee steps into your shoes and continues to take care of your finances: selling, buying, and paying bills.

After Death:

A successor trustee’s responsibilities are similar to an executor’s.   The successor trustee inventories your assets, pays final bills, files taxes, and follows your trust to distribute your assets to your loved ones.

A trust is a private document, so the court is not involved in the administration of the trust.   This is a positive dynamic, but it also places a lot of trust and responsibility on your successor trustee.   It highlights how important that position – and your decision – is.

What You Need to Know:

Your successor trustee will be able to do almost everything you could do with your property, as long as your trust allows it and it does not violate the successor trustee’s legal duties.

Fortunately, your successor trustee does not need to know everything.   Just like you can use professionals to aid you, your successor trustee can use an estate planning attorney, CPA, and other advisors to help them with their responsibilities.

Who Can Be Successor Trustees

As long as they are an adult, they can be a successor trustee.   Perhaps the better question is who should be your successor trustee.   To put it simply, it needs to be someone you trust, whether it be a child, other family member, friend, or a professional trustee (such as a bank or trust company).   You should also think about naming multiple alternates in case your first choice cannot serve.

What You Need to Know:

Your successor trustee needs to be someone that you can trust and know to respect and fulfill your wishes.

Actions to Consider

  • When you are deciding who your successor trustee should be, remember to consider what your estate looks like: how much you own, the type of assets you own, and how complex your trust is.   For example, if your trust plans on distributing property to your beneficiaries over years or decades, that is very different from lump-sum distributions.
  • Think about how qualified the candidates are: the skills, temperament, available time, etc.   Being a trustee does require a lot of someone, and you want to make sure that they can handle those demands and responsibilities.
  • Talk with the people you want to serve as successor trustees.   They should be aware of what you are asking them to do.   They should not find out that they are your successor trustee on the spot.   Give them time to prepare and know about their service.
  • Your successor trustee will be spending a good deal of time administering your estate.   Your trust should allow your successor trustee to be paid for their time as a token of gratitude for their work for you and your beneficiaries.