Successor Trustees
Key Points
A successor trustee takes over management of the trust when the current trustee is no longer willing or able to serve.
Most revocable living trusts name one or more successor trustees.
A successor trustee does not automatically serve immediately after the trust is signed.
The successor trustee's authority begins only under the circumstances described in the trust.
Choosing the right successor trustee is one of the most important estate planning decisions.
Introduction
One of the greatest advantages of a revocable living trust is that it includes a built-in plan for who will manage trust assets if you become incapacitated or after your death. That person is known as the successor trustee. Choosing the right successor trustee is one of the most important decisions you will make when creating a trust.
What Is a Successor Trustee?
A successor trustee is the individual or institution designated to take over administration of the trust when the current trustee resigns, becomes incapacitated, dies, or can no longer serve. Until one of those events occurs, the successor trustee generally has no authority to act.
When Does a Successor Trustee Take Over?
Most grantors who create a revocable living trust serve as their own trustee throughout their lifetime. The successor trustee steps in only after a triggering event identified in the trust agreement.
What Does a Successor Trustee Do?
A successor trustee's responsibilities often include locating and protecting trust assets, paying bills, communicating with beneficiaries, working with attorneys and accountants, filing required tax returns, and distributing assets according to the trust agreement.
Choosing the Right Person
The best successor trustee should be trustworthy, organized, financially responsible, and capable of making fair, thoughtful decisions. While living nearby can be helpful, good judgment and reliability are usually far more important.
Should You Name More Than One?
Many trusts name one or more backup successor trustees in case the first choice cannot serve when needed.
Common Misconceptions
A successor trustee has authority immediately.
Generally, no. A successor trustee's authority begins only when the circumstances described in the trust agreement occur, such as the current trustee's incapacity, resignation, or death.
A successor trustee can ignore the trust instructions.
No. A successor trustee has a fiduciary duty to follow the trust agreement and applicable law, even if they personally would have made different decisions.
The oldest child should automatically serve.
Not necessarily. The best successor trustee is the person or institution most capable of carrying out the responsibilities of the role with honesty, sound judgment, and attention to detail.
Frequently Asked Questions
Can I change my successor trustee?
Generally, yes. If your trust is revocable and you remain legally competent, you can usually amend your trust to appoint a different successor trustee.
Can I appoint a bank or trust company?
Yes. Professional fiduciaries, including banks and trust companies, can serve as successor trustees in appropriate situations, particularly when an estate is complex or an independent trustee is preferred.
What if my first choice cannot serve?
Most trusts plan for that possibility. It is common to name one or more alternate successor trustees who can step into the role if your first choice is unable or unwilling to serve.
Does the successor trustee become guardian of my children?
No. Serving as successor trustee and serving as guardian are separate legal roles. The person responsible for managing trust assets is not automatically the person responsible for caring for your minor children.
Your Next Step
Selecting a successor trustee is an important decision, but serving as successor trustee is only the beginning. Once that person assumes responsibility for the trust, they must carry out numerous legal and practical duties to administer it properly.
In the next article, you'll learn about trust administration—the process of gathering assets, paying debts and expenses, communicating with beneficiaries, filing required tax returns, and ultimately distributing trust property according to the trust agreement.
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About Jarrod Barron Law
Jarrod Barron Law helps Michigan individuals, families, and business owners make informed legal decisions through thoughtful, plain-English estate planning.
Disclaimer
This article is provided for general educational purposes only. It is not legal advice and does not create an attorney-client relationship.