Are you prepared to fulfill your role as a successor trustee in a living trust?
Being named executor in someone’s trust document is an honor, but it also comes with significant responsibilities.
Do you know what your duties are and how to fulfill them properly?
In this article, we will discuss the essential responsibilities and duties of a successor trustee and how to ensure that you fulfill your fiduciary duty to the trust’s beneficiaries.
By understanding your role and responsibilities, you can effectively manage the trust’s assets and distribute them according to the trust maker’s wishes while avoiding legal issues or family conflicts with beneficiaries.
Read on to learn more advice from a Ventura trust lawyer on what you need to know as a living trust executor.
What Is a Revocable Living Trust?
Revocable living trusts are a formal relationship in which the trust maker names a trusted individual (a trustee) to manage accounts and property for the trust maker’s benefit and the benefit of others (beneficiaries).
The trust document, created during the trust maker’s lifetime, is effective during their lifetime, during incapacity, and after death. The trust maker can change or terminate the trust at any time, which is why it’s called “revocable.”
What Are a Trustee and a Successor Trustee?
A trustee is an individual or entity appointed to manage a trust’s estate assets and property. When creating a revocable living trust, the trust maker is usually named the initial trustee.
This allows the trust maker to maintain control over and enjoy the trust’s accounts and property as before the trust was created but in a different role.
However, when the trust maker can no longer act as the trustee due to incapacity, death, or a voluntary desire to have someone else manage the trust’s accounts and property, a successor trustee takes over. A successor trustee is a person or entity the trust maker has named to take over when they can no longer act as trustees. It’s common to name the same person as the successor trustee and executor of your Last Will & Testament.
The successor trustee’s role is to manage and distribute the trust’s assets according to the trust maker’s wishes as outlined in the trust document. The successor trustee has a fiduciary duty to act in the trust beneficiaries’ best interests and follow the terms and purposes of the trust document.
As such, it is crucial for the trustee, especially the successor trustee, to understand their role and responsibilities and seek professional guidance if needed. A living trust attorney can provide valuable advice and guidance to ensure the trustee fulfills their duties properly and avoids legal issues or conflicts with the beneficiaries.
What Are Your Responsibilities and Duties as a Successor Trustee?
As successor trustee, you have some big shoes to fill—responsibilities and duties that govern the role you play in trust administration.
Here’s a breakdown of what that may look like.
As a successor trustee, you will have several responsibilities to carry out, including:
- Locating relevant estate planning documents to prove your authority to act and to understand the trust maker’s instructions.
- Collecting important financial documents, such as insurance policies, real estate deeds, bank and investment account statements, and tax returns.
- Meeting with the trust maker’s professional advisor team to plan the strategy for administering the trust and to prepare the legal documents needed to carry out that plan.
- Creating a list of debts, creditors, estate taxes, and current expenses.
- Making a list of the trust beneficiaries and heirs-at-law and their addresses to determine what type of notice each person is entitled to and when it will be given.
- Preparing a list of the trust’s property, accounts, jewelry, and other valuables to know where and how much they are worth and adequately protect them from loss or damage.
- Maintaining the trust accounting, keeping a record of all deposits, expenses, and transfers from the trust (even if they are to or for the benefit of your loved one).
- Managing the affairs and expenses of the estate, including paying debts, filing tax returns, and distributing assets
Fiduciary duty is a legal obligation that requires a person or entity, such as a trustee or executor, to act in the best interests of another party.
A trustee also has some important duties to be aware of, including:
- Duty to administer the trust according to the terms and purposes of the document and act in good faith.
- Duty of loyalty to administer the trust solely in the best interests of the beneficiaries unless the trust document allows for something different or unless a specific transaction is approved by a court or consented to by the trust beneficiaries.
- Duty of impartiality to act impartially concerning each beneficiary’s interest in the trust property and avoid showing favoritism between beneficiaries.
- Duty to control and protect trust property, including securing real property, and personal property and informing financial institutions of the trustee’s authority to control the trust assets.
What If You Need Help?
It’s understandable to feel overwhelmed when acting as a successor trustee, especially if you’re unsure how to fulfill your responsibilities and duties.
Fortunately, there are professionals who can help guide you through the process and provide valuable support. Consider delegating tasks to someone with comparable, more advanced, or specialized skills, such as an estate planning attorney, CPA, or financial advisor.
Services completed on behalf of the trust can be charged to the trust, not to you personally. By seeking professional help, you can ensure that you fulfill your fiduciary duty to the trust’s beneficiaries while protecting yourself from potential legal issues or conflicts.
Contact Hermance Law
Call us if you have any questions about your responsibilities as a living trust executor. The team at Hermance Law can help you navigate the necessary tasks and lend a hand when you are overwhelmed.
Our team of trust administration attorneys can guide you through the various steps of the administration process and ensure that you fulfill your duties as a successor trustee.
In addition, we offer our clients the added convenience of virtual meetings through video conferencing or by phone. Whether you have questions about your current or future responsibilities as a trustee or successor trustee, we’re here to help.
Call or text our office to schedule a FREE 15-minute phone call with one of our team members.
Being a living trust executor can be challenging, but with the right support and guidance, you can properly fulfill your duties and distribute assets. Don’t hesitate to contact us if you need help or have questions.