Choosing Your Successor Trustee

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.

Responsibilities of A Successor Trustee

If you become incapacitated

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 death

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.

Your Successor Trustee Acts Without Court Supervision

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.

What You Need to Know About Successor Trustees

Someone You Know and Trust

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.

Who Can Serve as Successor Trustees

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.

Consider the Size and Complexity of Your Trust

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.

Key Takeaways in Choosing a Successor Trustee

  • Choose your trustees carefully! Successor trustees have a lot of responsibility - they will carry out your plans.
  • Consider the qualifications of your candidates, including personalities, financial or business experience, and time available due to their own family or career demands. Taking over as trustee for someone can take a substantial amount of time and requires a certain amount of business sense.
  • Be sure to ask! The people you are considering may not want this responsibility. Don't put them on the spot and just assume they want to do this.
  • Trustees should be paid for their work. Your trust should include fair and reasonable compensation for your Successor Trustee.

You are not alone in making this important decision

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.

If you would like to learn more about creating an estate plan specific to you and your family call us for a free initial consultation at

(707) 937-2701

email me at debra@decarlilaw.com

or use our online calendar to schedule an appointment

https://calendly.com/decarlilaw/initial-consultation.

 

 

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