Acting As Trustee For a Living Trust: What You Need to Know
living trust is created, the settlors (the person(s) who created the trust) must designate
someone to act as the trustee for that trust. Most of the time, for a
revocable living trust, the settlors will also serve as the initial trustee
or co-trustees during their lifetimes. In doing so, they are able to maintain
complete control and management over their assets. Married couples will
often choose to both serve as co-trustees, so each maintains control over
Most importantly, in the trust, the settlors must also designate
successor trustees to act when the settlors can no longer act, either because of incapacity
or death. If there are co-trustees, the successor trustee will act when
the surviving spouse passes away. When the first spouse dies, the other
surviving spouse will continue to act as the trustee by himself/herself.
It is only when the second spouse passes away that the successor trustee(s)
begins to act as the trustee for the trust. This is where your choice
of successor trustee is extremely important.
Choosing A Successor Trustee
After the settlors pass away, the successor trustee will step into their
shoes and then have full control over the trust assets. The new trustee
must carry out the settlors' instructions in regards to the trust
and the distribution of assets. Therefore, it is extremely important that
the trustee is responsible, diligent, thorough, and capable of assuming
the role of trustee. So, what does being a successor trustee entail? The
job and responsibilities can be very time-consuming, and the trustee must
ensure that the trust assets get distributed to the correct beneficiaries.
The trustee will have control over your finances, takes inventory of your
assets, pays bills and creditors, and prepare any final tax returns.
The trustee will do all of this without direct court supervision, making
it easier and more efficient to handle your final affairs. However, the
onus will also be on the trustee to initiate this process and make sure
the process goes smoothly. So, make sure your trustee is responsible and
detail oriented. Many times, settlors will choose their adult children,
siblings, or trusted friends to serve as successor trustees. The successor
trustee does not have to be an expert on finances and legal proceedings--that
is what your attorney and CPA are there for.
Picking a successor trustee will have long-lasting consequences. Before
designating one, you should have an in-depth discussion with potential
trustees, so that they know what they are getting into. At
Atlantis Law, our
estate planning attorneys will work with you to ensure that you make a fully informed
decision, one that will best benefit your loved ones. The whole reason
you created an estate plan was to make sure your assets were distributed
how you want, and picking the right successor trustee is the only sure
way to do so.
contact us today to schedule your free estate planning consultation. We will guide
you through the process of creating an estate plan the right way, so that
all of your wishes are carried out exactly how you want.