The creation of a Trust can help bolster your Estate Plan and provide an extra layer of protection over the distribution of your assets. There are several types of Trusts depending on your specific needs, but most will require you to appoint a Successor Trustee. Much like the Executor of a Will, the Successor Trustee will manage the Trust after your death.
Selecting a Successor Trustee can be intimidating -- as can being chosen for this role by a loved one. Whether you are deciding who to place in charge of your Trust or you have been selected to administer someone else’s, it can be helpful to understand the role of a Successor Trustee. Keep reading to learn more about the responsibilities of a Successor Trustee and let us answer your questions:
What is a Successor Trustee?
A Successor Trustee is the person responsible for administering and settling a Trust after the creator (called the Grantor) of the Trust dies. A Successor Trustee is also responsible for the Trust in the event the Grantor becomes incapacitated or unable to make decisions. The exact responsibilities of a Successor Trustee will vary depending on the instructions left by the Grantor.
The Successor Trustee definition is especially relevant when creating a Revocable Living Trust. In a Living Trust, the Grantor often serves as the initial Trustee until their death but will eventually need a successor to take over. Grantors can choose to nominate a close relative, family friend, or even financial institution to take on the role of Successor Trustee.
A Grantor will name their Successor Trustee within a document called a Declaration of Trust, which is also where their role will be explained. In some cases the Successor Trustee will be required to oversee the Trust for several years, for example if the beneficiaries are minor children and need to come of age before the distribution of assets is possible. For this reason, the role of a Successor Trustee is a large and often time-consuming responsibility.
Commonly Asked Questions About Successor Trustee Appointment & Responsibilities
Most people are unfamiliar with the ins and outs of managing a Trust, especially the responsibilities that come with it. Now that you have a better idea of what a Successor Trustee is, the following commonly asked questions should help fill in any gaps. Read through the answers below to learn more about the role and responsibility of a Successor Trustee.
What Are Typical Successor Trustee Duties?
Typical Successor Trustee duties include the management of the Trust and the distribution of assets -- though the exact responsibilities will be set by the Grantor. The Successor Trustee must act with the Trust’s beneficiaries in mind, and cannot make decisions for their own benefit (unless specified in the Trust). The role of the Successor Trustee will also change depending on whether the Grantor has died or become incapacitated.
If the Grantor has died, the role of the Successor Trustee typically starts by notifying family members, relatives, and financial institutions of the death. The Successor Trustee must also notify beneficiaries and provide copies of the Declaration of Trust. They must then coordinate with the Executor of the Will to close any accounts and pay off debts using the Trust. The Successor Trustee must then distribute property and assets to the correct beneficiaries, and ultimately close the Trust when specified.
The responsibilities of a Successor Trustee will vary slightly if the Grantor were to become incapacitated. In these cases, the Successor Trustee will notify the family and beneficiaries of the Trust, and then assemble necessary information about the Trust. The Successor Trustee is also often responsible for identifying and applying to disability benefits on behalf of the grantor. These duties also include documenting receipts, expenses, and communications.
What’s Involved in the Appointment of Successor Trustee?
If you are appointed as a Successor Trustee, the first step will be to meet with the Grantor of the Trust to discuss your responsibilities. The Grantor will also review the Declaration of Trust and tell you where it is kept (along with any other important documents). At this point they will inform you of their expectations and give you a better idea of your specific duties.
It is worth saying that you are not obligated to accept the role of Successor Trustee. While you will likely only be nominated by a close friend or relative, you are not required to accept the role. When creating the Trust, the Grantor likely chose an alternate Successor Trustee -- who would then step in if you were to decline. While the exact responsibilities will vary, becoming a Successor Trustee is generally a big commitment.
Successor Trustee vs Executor - What’s the Difference?
The role of a Successor Trustee and Executor are somewhat similar, and the two people will often work together after the death of the Grantor. As mentioned above, the Successor Trustee takes over the management of the Trust after the Grantor dies. Depending on the specific Trust, this responsibility could last several years as beneficiaries come of age.
An Executor, on the other hand, is responsible for handling someone’s affairs immediately after death. Their role is important in closing ongoing affairs in a timely manner, like utility payments, rent, etc. The Executor must also promptly pay any debts and taxes, and distribute items as specified in the will. The Executor is in charge of reporting each of these duties to probate court and closing the Estate. A Successor Trustee can work with them during this process, but their responsibilities only relate to the Trust.
Trustee vs Successor Trustee - What’s the Difference?
A Trustee and Successor Trustee have a similar responsibility, but on a different timeline. As soon as a Trust is created, a Trustee is placed in charge of any property within the Trust. They become the legal owner of its assets, and they must act in accordance with the Declaration of Trust. With a Revocable Living Trust, the Grantor is typically the Trustee. In an irrevocable Trust, the Grantor must name someone else as a Trustee when the Trust is created.
A Successor Trustee is almost always named to ensure the Trust will still be managed after the death of the Grantor or initial Trustee. The successor’s responsibilities will be the same as that of the Trustee -- though they often have the added task of settling the Trust.
Who Should Serve as a Successor Trustee?
Your Successor Trustee should be someone you trust to carry out your financial affairs, look out for your beneficiaries, and act in accordance with your wishes. They will not be supervised by the court during this process. It can be difficult to think about handing all of this responsibility to one person, but it is crucial to make sure the Trust is managed and closed appropriately. Here are a few options to consider when selecting a Successor Trustee:
Adult children or other relatives
Close family friends
A financial advisor or tax professional
An Estate Planning lawyer
A Trust company
The most important thing to keep in mind as you select a Successor Trustee is to choose someone who can handle the role. This person will be in charge of navigating complex legal documents, managing your finances, and communicating with your beneficiaries. Choose someone who will have the time and understanding to complete each of these responsibilities -- and don’t be afraid to call in a professional.
How to Sign as Successor Trustee?
When you are nominated to serve as a Successor Trustee, you will be given the choice to accept or decline the role. If you choose to accept, the Grantor will typically meet with you to review the Declaration of Trust. At this point, you will wait until it is time for you to begin administering the Trust.
As a Successor Trustee you must make the required filings and obtain the authority to start your role after the death of the Grantor. This usually requires providing the Death Certificate and signed Trust agreement to any institutions you are working with. You will then follow the responsibilities laid out by the Grantor and manage the Trust until you have completed your duties.
Becoming a Successor Trustee is a big commitment, and it often gets people thinking about their own Estate Plan. Whether you already have a Trust or not, this can be a great opportunity to get your own affairs in order. You can start with the creation of a Last Will and Testament -- and go straight into planning which type of Trust you may need. If you have questions about this process, remember that our team is here to help.
The role of a Successor Trustee can last for years, and it often requires some financial and legal understanding to complete. If you are planning your own Trust, think about who will be able to handle this level of responsibility. Remember that you can always call in a professional. For those who have recently been chosen as a Successor Trustee: think carefully about the role you are accepting and don’t be afraid to reach out to an Attorney or professional for guidance. Is there a question here we didn’t answer? Reach out to us today or Chat with a live member support representative!