Should I Panic about being Named Successor Trustee?

     In October, we explained how a trust works. We have also recently addressed the role of the Personal Representative in the probate process. As a follow-up to those posts, today we will discuss the role of the successor trustee of a Living Trust. 

     Normally the Grantor, the person who set up the Living Trust, acts as the initial Trustee, with total control over the trust assets. The Grantor designates other individuals or corporate fiduciaries, to act as successor Trustees upon their incapacity or death. Most successor trustees do not understand their role, either during the lifetime of the Grantor or at their death or disability. It is important that the Successor Trustee be aware of their designation so that they can assume the role and responsibilities of trustee quickly upon the death or incapacity of the initial Trustee. The successor Trustee should either have access to the trust document because they have been given a copy of the Trust document or at least know where the document is located. The Successor Trustee must review the document in order to understand their obligations. Because the Successor Trustee is a fiduciary and therefore subject to a high degree of care in order to avoid liability for actions the trustee, should seek clarification of any questions from the attorney who drafted the trust or another attorney regarding the successor’s responsibilities. 
     The trustee can use a copy of the Trust or the Certificate of Trust Existence and Authority to show their authority when acting on behalf of the Trust. These documents will show their power to deal with assets of the trust, wherever located. Armed with knowledge of the trust and a copy of documents showing their authority, the trustee can then take action on behalf of the trust beneficiaries. One of the Successor Trustee's important duties is determine the scope and amount of the Trust assets and inform the institutions maintaining those assets of the change in Trustee. This step is much like the Personal Representative's role in discovering the estate's assets except that it does not rely on the Probate Court's order to establish the Trustee's authority to act and therefore can occur quicker and with fewer problems. It is important for the successor Trustee to establish a thorough accounting of the Trust assets because, like the Personal Representative, the successor Trustee is responsible for providing the Beneficiaries of the Trust with a regular accounting of the Trust assets. Our next post will deal with more of these important actions.

Matt Ferrara