Who should you choose to be your successor trustee? If you have a revocable living trust, you probably named yourself as trustee so you can continue to manage your own financial affairs. Eventually, someone else will need to step in when you are no longer able to act due to incapacity or after your death. Your successor trustee plays an essential role in the effective execution of your estate plan.
If you become incapacitated, your successor trustee will step in and take full control of your trust for you. This includes financial decisions involving trust assets, selling or refinancing assets if needed. Your successor may also pay bills and help make sure you get the care you need. Remember - Your trustee can only manage assets that the trust owns, so it’s vitally important that you fully fund your trust.
After you die, your successor trustee acts as an executor of your estate. This includes taking an inventory of your assets, paying your final bills, and having your final tax returns prepared. Your successor trustee will distribute your assets according to the instructions in your trust. Again, the successor trustee is limited to managing assets that are owned by the trust. You must fund your trust as soon as possible after creating it.
Having a trust means you’re your successor trustee can handle your privately and efficiently. You should feel confident that the person you choose will be able to get things started and keep them moving along.
Your successor trustee should be someone you know and trust. You should pick someone whose judgment you respect, and who will also respect your wishes. It isn't necessary for the successor trustee to know exactly what to do and when, because your attorney, CPA, and other advisors can help guide him or her, but it is important that you name someone who is responsible and conscientious.
Successor trustees can be adult children, other relatives, a trusted friend or a professional or corporate trustee (bank trust department or trust company). If you choose an individual, you should name more than one in case your first choice is unable or unwilling to act.
When choosing your successor, keep in mind the type and amount of assets in your trust. Equally important is the complexity of the provisions in your trust. For example, are there are ongoing provisions in your trust for your beneficiaries after you die? If so, this will require more work for your trustee than if your assets will be distributed all at once.
We can help you. A significant part of our initial consultation focuses on trustee selection. If you have any questions or concerns, please schedule an appointment with us.
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