When you create a living trust, you usually
need to choose who to name as your successor trustee. It is crucial that this
decision is not taken lightly and that the right person is selected for the
job.
Role of
Successor Trustee
If you become incapacitated, your successor
trustee will step into your shoes and take full control of your trust assets on
your behalf. This means he or she will have full authority to make financial
decisions -- including selling or refinancing trust assets. In fact, as long as
the act does not interfere with the instructions in the trust document and does
not breach any fiduciary duty owed, your successor trustee is given broad
authority over your trust assets. The authority is very helpful in many
circumstances because it avoids costly, time consuming court proceedings, like
guardianship, conservatorship, or probate.
After your death, your successor trustee acts
in the same capacity as an executor: taking an inventory of all trust assets,
paying outstanding debts, selling assets (if needed), preparing your final tax
return, and distributing any remaining trust assets according to the
instructions in your trust document.
Under either scenario, your successor trustee
will perform his or her acts without court supervision, providing your family
with privacy and usually reducing costs. While a living trust allows for your
affairs to be handled efficiently and privately, it is up to your successor
trust to ensure 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 estate planning attorney, CPA, and
other financial advisors can be enlisted to help guide him or her through this
process.
Choosing
a Successor Trustee
A successor trustee can be a spouse, adult
child, other relative, trusted friend, or a corporate trustee. If you chose a
non-corporate trustee, it is important to name a sequence of people in case
your first choice is unable to act as trustee. 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.
When deciding who should be your successor
trustee keep in mind the type and amount of assets held in your trust, the
complexity of the terms of your trust document, and the qualifications of your
candidates. Taking over as trustee can require a substantial amount of time and
demands a certain level of business and common sense. Make sure you ask the people
you are considering as successor trustees whether or not they want the
responsibility of managing your trust. Finally, successor trustees should be
paid for their time and work. This can be done through your trust document,
which should provide for reasonable and fair compensation. Of course, corporate
trustees will only accept a position if there’s compensation. If you’re
considering a corporate trustee, it’s a good idea to start looking around now.
We can help you with the search as part of the estate planning process.
Bottom
Line
An estate planning attorney can help you make
the important decision of choosing a successor trustee. We are here to answer
any questions you may have and provide you the best options for your needs.
Furthermore, if you created your estate plan
several years ago and your appointed successor trustees are no longer around or
have expressed their intent to not serve in such a capacity, we would be available
to modify your trust and other instruments to ensure you have appointed an
appropriate individual can serve your wishes.
Please give us a call at 619-810-4644 or email
us at mark@ignaciolaw.com for further
information.
Comments
Post a Comment