It is a great honor to be named a successor trustee in someone’s revocable living trust document. However, the honor comes with great responsibility. No matter why you were appointed to this role, whether it was due to someone’s death or incapacity, we’re here to support you through the entire trust administration process. If you have detailed questions about trust administration, we invite you to contact our Palo Alto estate planning law firm for assistance.
Revocable Living Trust – What Does It Mean?
A revocable living trust is a popular future planning tool that decides who will get your property when you die. It is a formal contract between the trustmaker and an individual (the trustee) to hold and manage the property for the benefit of the trustmaker and others (beneficiaries).
In most cases, trust refers to a legal document that converts this relationship into writing. This document is applicable during the life and after the death of the trustmaker. A revocable living trust is a living document because you can make it, change it, or terminate it during your lifetime.
What Is a Trustee?
An independent trustee manages, invests, and distributes the funds and properties that belong to a trust. While creating the revocable trust document, the trustmaker usually names themself as the initial trustee. As a result, the trustmaker can control and manage their property as the trustmaker did before the trust, just in a different role.
A successor trustee is a person who assumes control of the property when the original trustee becomes incapacitated or dies. A successor trustee is only permitted to manage trust assets, not assets that belong outside.
My Responsibilities and Duties As A Successor Trustee
As mentioned above, a trustee is an individual who manages, invests, and distributes the funds that belong to a trust. Acting as successor trustee may require you to fulfill the following responsibilities:
- You need to locate the documents related to estate planning. You will require these documents to demonstrate your authority to act and to understand what the trustmaker has requested you to do.
- Prepare an inventory of valuable documents such as insurance policies, car titles, bank statements, tax returns, and real estate deeds.
- Identify current debts, creditors, and expenses. As the manager of the trust, it is your job to make sure that all bills get paid.
- Hire a professional advisor team (real estate attorneys, financial advisors, tax professionals, etc.) to create a converting strategy for the trust and prepare the legal documents necessary to implement the plan.
- Manage the accounting of the trust property — keep a record of all deposits, expenses, and transfers from the trust.
- You should make a list of all property, accounts, jewelry, and other necessities. The items owned by the trust are now under your supervision. You must know their value and where they are. Protecting assets from loss or damage is now your responsibility.
- Write down the addresses of beneficiaries of the trust and heirs-at-law. Your attorney can help you determine what type of notice an individual will receive, how it will be delivered, and when it will arrive.
In addition to these responsibilities, a trustee has to fulfill the following duties:
Act in good faith: The trustee must follow the terms and purposes of the trust document and act in good faith.
Be Loyal: It is the trustee’s responsibility to administer the trust in the best interests of the beneficiaries unless the trust document, a beneficiary, or a court allows a specific exception.
Be Impartial: If there is more than one trust beneficiary, then the trustee is required to act impartially with regard to the interest of each beneficiary. Trustees must avoid favoritism of any trust beneficiary.
Control and Protect the Property: It is the responsibility of the trustee to secure the real property, add security locks, and take other protective measures to protect against loss or damage. A trustee must also show proof of their authority to the relevant financial institutions in order to control the financial assets of the trust.
What Should I Do, If I Need Help?
Accepting the position of successor trustee can be a little daunting when you look at the job details. Not to worry, you don’t have to manage this process on your own. Your advisor team (trust attorney, Certified Public Accountant (CPA), insurance agents, financial advisers, etc.) will be there to give guidance. If management of the trust feels like more than you can handle, you may consider retaining an experienced trust administration attorney.
Note: The trust is charged directly for services that it receives. You are not billed directly for them.
Final Words
If you have some questions about your responsibility as a trustee or successor trustee, get in touch with us. Our team will be pleased to assist you if you have any questions about your duties as a trustee or successor trustee. In times of stress, we can offer advice and assist you in achieving your goals.
