When you create a living trust, you must name a successor trustee to take over for you if you are unable to act due to incapacity or your passing. It is crucial that this decision be given careful consideration and that the right person be selected for the job.

Role of Successor Trustee

If you become unable to manage your financial affairs or disabled (also referred to as incapacitated), your successor trustee will step into your shoes and take full control of your trust’s accounts and property on your behalf. This means the trustee will have full authority to make financial decisions, including selling or refinancing trust accounts and property. As long as the trustee’s actions do not interfere with the instructions in the trust document and do not breach any legal duty owed, your successor trustee is given broad authority over your trust accounts and property. This authority is very helpful in many circumstances because it avoids costly, time-consuming court proceedings such as guardianship, conservatorship, and probate. CLICK HERE FOR MORE INFORMATION ON PROBATE.

After your death, your successor trustee acts like an executor, taking inventory of all trust accounts and property, paying outstanding debts, selling property (if needed), preparing your final tax return, and distributing any remaining trust accounts or property according to the instructions in your trust document.

Under either scenario, your successor trustee will perform the trustee’s duties without court supervision, providing your family with privacy and saving money. While a living trust allows your affairs to be handled efficiently and privately, the successor trustee must ensure that the administration begins and stays on track. That being said, the successor trustee need not be an expert on what to do and when. Your trustee can enlist your estate planning attorney, certified public accountant, and other financial advisors to help guide him or her through this process. CLICK HERE FOR MORE INFORMATION ON A TRUST.

Choosing a Successor Trustee

A successor trustee can be a spouse, adult child, family member, trusted friend, bank or other institutional trustee, or professional trustee. If you choose a noncorporate trustee, it is important to name alternates if your first choice is unable or unwilling to act as trustee. When deciding who should be your successor trustee, keep in mind the type and amount of property held in your trust, the complexity of the terms of your trust document, and your candidate’s  qualifications. Taking over as trustee can require a substantial amount of time and demands a certain level of business and common sense. Accordingly, you should ask the people you are considering as successor trustees whether or not they want the responsibility of managing your trust. Whomever you choose, it should be someone you know and trust, whose judgment you respect, and who will respect your wishes and carry them out accordingly.

Finally, successor trustees should be paid for their time and work. Your trust document should provide for reasonable and fair compensation. Of course, corporate trustees will only accept a position if the trust provides adequate trustee compensation. If you are considering a corporate or professional trustee, it is a good idea to start looking for one as soon as possible. We can help you with the search as part of the estate planning process.

Bottom Line

An estate planning attorney can help you with the important decision of choosing a successor trustee. We are here to answer any questions you may have and explain the options that will best suit your needs. Call or text our office at (805) 518-9633 or click here to schedule a {Free} 15-Minute Phone Call.  As an added convenience for our clients, we are available to hold our meetings through video conferencing or by phone.