Selecting a Successor Trustee

If you have or are considering a revocable living trust, you should name who will take over the management of the assets in your trust and the handling of trust related finances if you become incapacitated or after you die. This person is called a successor trustee. There are responsible for following the instructions in the trust agreement. In general terms, this includes:

  • Locating, securing control over and protecting trust assets
  • Collecting life insurance policies, annuities, and retirement accounts on which your revocable living trust has been named the primary beneficiary
  • Coordinating with the personal representative or executor of your estate if court probate administration is necessary
  • Paying any expenses of last illness
  • Identifying, settling and paying any outstanding debts
  • Having appropriate tax returns prepared and filed
  • Distributing specific gifts and trust assets to the beneficiaries

If you are still alive and particularly if you might recover, some of this will not be needed. Whether this is the case or you pass away, the selection of the person who you entrust with this job (it is a job, sometimes, full time, sometimew part time) is a serious matter.

If you are married and your spouse is still alive and healthy, your trust agreement may provide that they simply continue as the sole trustee and that no assets are to be distributed until the second one is gone. If your beneficiaries are your adult children, it may make sense to name one of them as successor trustee. If there may be conflict between them, perhaps from childhood, naming someone else could make better sense.

A successor trustee can also be another family member, trusted friend, bank or other institutional trustee, or a professional trustee. If you choose a family member of friend, it is important to name alternates if your first choice is unable or unwilling to act as trustee. When you consider who should be your successor trustee, keep in mind the type and amount of property held in your trust, the complexity of the trust agreement and instructions, and your candidate’s qualifications. Taking over as trustee can require a substantial amount of time and demand a certain level of business and common sense.
It is appropriate, especially for family members and friends, that you first ask 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.

Your estate planning attorney can help you with this decision.