You’ve been named as a Successor or Alternate Successor Trustee of your friend’s/loved one’s revocable living trust. As their chosen trustee, you now have the responsibility to ensure that all designated wishes are carried out accordingly and accurately in accordance with trusts’ provisions. Our overview provides guidance for understanding what this role entails and addresses common questions so you can be well-informed about your duties moving forward. (Note: If named an Alternate Successor Trustee, then service is required only if initial Choice cannot serve.)
Understanding the Concept of a Revocable Living Trust
A Revocable Living Trust is an estate planning tool that enables a Grantor to decide how their property will be distributed after they are gone. By placing assets into the trust, which is first managed by them as the initial Trustee, they can provide clear guidance and peace of mind for their loved ones in advance.
Understanding what a Successor Trustee Is
As a trust’s Grantor passes away or is no longer able to administer it, the Successor Trustee steps in and takes on their responsibilities according to the Declaration of Trust. The document sets out exactly what tasks they are expected to complete while administering the estate as designated by its creator, ensuring that even beyond death this individual’s wishes remain respected and carried out.
Understanding What a Successor Trustee’s Duties Are?
The duties of a Successor Trustee vary greatly dependent on the Declaration of Trust, local law, and whether or not the Grantor is living. Typical responsibilities which may be encountered include anything from safeguarding trust property to distributing assets accordingly. It can be wise to seek legal advice when dealing with such an important matter as this one; fortunately, any associated costs would usually qualify for reimbursement through the trust’s expense fund.
Trustees are tasked with properly administering trusts, and must work solely in the interest of beneficiaries. If a trust’s Declaration allows it, trustees may act for their own benefit as well; otherwise they’re obliged to uphold the terms of the trust agreement.
Responsibilities of a Successor Trustee After the Grantor’s Passing
After the Grantor has passed away, the responsibility of a Successor Trustee is to honor their wishes by managing and distributing trust property in accordance with instructions. This includes safeguarding assets from any potential waste or loss until all distributions have been fulfilled.
Here’s a summary of some other duties of a Successor Trustee…
- Inform the Grantor’s family that you are the Successor Trustee
- Make sure the named beneficiaries have an up-to-date copy of their Declaration of Trust
- Obtain certified copies of the Grantor’s death certificate
- Gain information about any property held in the trust, and take any steps necessary to secure and protect it.
- Notify the banks if accounts have been placed in the trust let them know you can have access to them
- Alert any applicable organisations, such as Social Security Administration, life insurance companies and retirement plans to gain access to death benefits
- Pay any outstanding bills and taxes, using trust property. Keep receipts of these expenses paid
- Ensure the Grantor’s trust receives any remaining property that was not initially placed within it when the Will is a “Pour-Over”, strategizing with the Executor to ensure all assets are duly included.
- Once their purpose has been fulfilled, it is best to close out the Grantor’s accounts. Consider terminating services such as credit cards and internet; however, be sure not to overlook utility bills and insurance policies that play a role in protecting important assets
- With the Grantor’s trust property, we must ensure that their final wishes are met. The more specific instructions should be fulfilled first before distributing remaining assets in accordance with general provisions of the declaration of trust. When necessary, estate sales may need to take place so cash can then be distributed to beneficiaries as instructed.
Successor Trustee Duties When the Grantor is Incapacitated, but Still Living
The Grantor’s care and comfort is the primary priority of a Successor Trustee in instances when they are incapacitated, yet still living. On top of this obligation, trust property may also be utilized to ensure that those close to them remain cared for as well.
As when the Grantor has passed away, Successor Trustees should typically:
- Inform the Grantor’s family that you are the Successor Trustee
- Gather essential details about the trust property and take necessary precautions to ensure it is kept safe
- Reach out to the appropriate banking and financial institutions, so you can unlock access to any trust accounts
- Apply for any disability benefits that the Grantor might be entitled to
- Working alongside the designated representatives granted by Financial and Healthcare Powers of Attorney, to manage all Grantor’s affairs ensuring bills are taken care of in a timely manner, taxes remain up to date – guaranteeing that their health needs are fulfilled
- Maintaining a keen eye on spending is essential for success. Make sure to keep all records and receipts of bills paid and expenses incurred in the course of your duties. Doing so will help ensure you remain fully informed about expenditures related to work activities!
Is it necessary for me to fulfill the role of Successor Trustee?
Being nominated as Successor Trustee does not commit you to serve. You can consider the implications and decide whether it is something that fits within your responsibilities at this time or if another course of action should be taken. If no Alternative was named in the Declaration of Trust, steps would need to be implemented regarding how a new Successor Trustee will be selected. It’s best for all parties involved to communicate any reservations concerning service right away so an alternative solution may promptly take its place.
As successor trustee, you can choose to nominate a new individual in your place should the conditions specified by the Declaration of Trust be met. You are not bound to remain in this role indefinitely if such an arrangement could better serve the trust’s beneficiaries.
