Successor Trustee

You’ve just been notified that someone wants to name you as their Successor Trustee and you’re thinking “wow, what does that mean? What does that entail? What will be my responsibilities? And you may even be thinking, “can I say no”?

These are all good self questions around this big responsibility and I will go into detail around the responsibilities that come with this role to help you in evaluating if this is a good choice for you.
As a Successor Trustee, you will have duties should the Grantor (the person who named you) become incapacitated or should they pass away.

In the event the grantor becomes incapacitated, but still living, these would be the duties falling under your responsibility:

– Inform the Grantor’s family and loved ones that you are the Successor Trustee.
– Assemble information about the trust property and take any steps necessary to secure and protect it.
– Notify the bank and financial institutions that hold any accounts placed in the trust, so that you can have access to them.
– Apply for any disability benefits that the Grantor might be entitled to.
– Coordinate with the Grantor’s Agents under any Financial or Healthcare Powers of Attorney to conduct the Grantor’s business, pay outstanding bills and taxes, and ensure the Grantor receives the care he or she needs.
– Keep records and receipts for any bills you’ve paid, and expenses you’ve incurred, in the course of your duties.

If the Grantor has passed away, as Successor Trustee, your duties would include the following:

– Inform the Grantor’s family and loved ones that you are the Successor Trustee.
– Provide copies of the Declaration of Trust to the beneficiaries named therein.
– Obtain certified copies of the Grantor’s death certificate – these may be necessary to prove the Successor Trustee’s legal authority to administer the trust property.
– Assemble information about the property held in the trust, and take any steps necessary to secure and protect it.
– If the Grantor has placed bank accounts in the trust, notify the relevant banks so that you can have access to them.
– Similarly, notify the Social Security Administration, life insurance companies, retirement plans, and any other organizations that will provide death benefits to the Grantor.
– Coordinate with the Executor of the Grantor’s Will to pay any outstanding bills and taxes, using trust property. Be sure to keep receipts of these expenses paid.
– If the Grantor’s Will is a “Pour-Over Will” that names the trust as the beneficiary of any remaining property that was not placed in the trust, coordinate with the Executor to have this property added to the trust, as well.
– Close the Grantor’s accounts once they’re no longer needed. For example, credit card, phone and internet service accounts can typically be closed. However, you may want to keep utility accounts and insurance policies active to preserve the value of the assets they apply to.
– Distribute the Grantor’s trust property to the beneficiaries specified in the Declaration of Trust. Instructions to distribute specific pieces of property to specific beneficiaries should be carried out first, before turning to general instructions regarding how remaining property should be distributed. (Note that you may need to conduct an estate sale to liquidate remaining assets into cash.)

After looking this over if you are thinking, “this is too much” or “how could I decline?” You absolutely can decline. Being nominated does not obligate you to take on the role of Successor Trustee. If you do choose to decline, then the next Alternate Successor Trustee named in the Declaration of Trust will have the chance to serve. If you are quite certain you would not be comfortable in the role of Successor Trustee, it is best to let the Grantor know as soon as possible so that they can choose a willing candidate to name in that position in their trust.

If you do accept this role for the Grantor, be sure to find out where they will be storing the trust so that it is easily accessible by you when the time comes for you to fulfill the duties.

What are the top three duties you would want more information about when you become the Successor trustee or Executor of the estate?

What three questions would come to mind if a loved one asked you to be their Success trustee?

What would you want to know before a loved one passes about their Trust?

Trustees and Executors are similar in many ways. They are both fiduciaries.

A fiduciary is someone who is put in charge of someone else’s money. A Trustee is a fiduciary over a Trust, and an Executor is a fiduciary over a probate estate.

Trustees are responsible for administering a trust to the beneficiaries according to a legal agreement, whereas Executors distribute a deceased person’s assets according to a will. Executors must obtain a court order to act on a will.

Trustees are named in Trust documents to act when the original Trustee(s) dies or stops acting. Usually, the person who creates the Trust (the settlor) is also the Trustee to start with. Once the settlor dies or stops acting, the named successor Trustee takes over. Trustees can take over management of the Trust without court intervention. The Trust document provides the procedure, and the successor Trustee usually agrees to act. Once the Trustee agrees to act, then they assume the powers of a Trustee under the Trust documents. It’s just that easy.

Once acting, the Trustee also assumes all of the duties and responsibilities outlined in both the California probate code and the Trust document. Keep in mind that the Trustee is not the same thing as the Trust beneficiary. The Trustee does not receive the Trust assets (unless the Trustee is also named as a beneficiary). And the Trustee does not have the right to change the Trust terms in most cases. Instead, the Trustee must manage the Trust assets according to the Trust documents. Eventually, the Trustee must also distribute the Trust assets as provided in the Trust document.

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