Before Naming A Successor Trustee, Make Sure to Get Consent

One of the most important decisions when drafting a trust is deciding who will serve as the successor trustee, which is the person or institution who takes over management of the trust when the trustor (the creator of the trust) has died or has become incapacitated. Typically, individuals leave this important role to a responsible person or party who can be trusted to carry out the trustor’s final wishes and manage the trust properly.

Once trustors have a particular individual in mind, it’s easy just to have their attorney insert his or her name into the trust document without any additional consideration. However, forgetting to inform and confirm that the successor trustee is willing and able to take on the important role is a considerable mistake.

What are the duties of the successor trustee?

A trustor should consider who is best equipped to handle the myriad of responsibilities before naming a successor trustee. Depending on the complexity and size of the estate, duties may include the following:

• Initial tasks – Accept the role of a successor trustee, notify the attorney who authored the trust, and study the trust. Look for instructions regarding anatomical gifts and funeral and burial/cremation preferences. Become familiar with assets held by the estate.
• Safeguarding and managing assets – At the appropriate time (the death or incapacitation of the trustor), the successor trustee is responsible for safeguarding and managing the estate’s assets, which could include financial and investment accounts, real estate, any valuables, the contents of a safe deposit box, digital assets, and more.
• File income taxes and make payments – The successor beneficiary is responsible for filing the decedent’s state and federal income tax returns and paying taxes due. He or she is also responsible for paying property taxes, and estate and inheritance taxes, if required. The successor trustee would also pay beneficiaries and deliver specific bequests.

Who should you select as your successor trustee?

Consider a person who is responsible and capable of handling the responsibilities listed above. Look for pertinent skills the potential successor trustee may have, and if he or she is a fast learner. A candidate who lives nearby is another plus, however, technology and the convenience of sending and signing documents online make geography less of a consideration than it used to be.

It is important to confirm that the individual is willing to take on the role before finalizing any documents. Even if he or she seems like the perfect candidate, an unwillingness to take on the job will create problems.

Trustors may decide to designate a professional to serve as a successor trustee or as a co-trustee with a family member. An advantage of using a professional is that it reduces the chances of a lawsuit between heirs, which may occur when an heir serves as the successor trustee.

Help is available

The estate planning attorneys at O’Reilly Rancilio are available to assist with the creation of trusts and the selection of trustees. Attorneys also serve as co- and successor trustees for individuals. To speak with an attorney, please call 586-726-1000 or visit our website.