Creating a revocable trust can be a smart way to manage how your assets are distributed after you pass away. One important element of a revocable trust is the successor trustee. SmartAsset makes the case that you should name one if you have any revocable trusts. This can help carry out your wishes when you’re indisposed or deceased.
When you set up a revocable trust, you serve as both the creator (settlor) and the trustee. This means you can move assets in and out of the trust, change its terms and even dissolve it. The trust is “revocable” because you can change it while alive.
A successor trustee is the person you name to manage your trust when you can no longer do so, typically upon your death. The successor trustee enforces the terms of the trust and distributes assets according to your wishes.
A successor trustee can manage your trust without probate court intervention. Once you, as the primary trustee, pass away, the successor trustee can immediately manage your trust and avoid any delay in execution.
The duties of a successor trustee begin once you can no longer serve as the trustee, typically upon your death. Their responsibilities include:
- Managing Trust Assets: The successor trustee must responsibly manage and invest the trust assets.
- Appraising and Distributing Assets: They must appraise the value of the trust’s assets, pay any taxes or debts and distribute the remaining assets to the beneficiaries according to the trust’s terms.
- Handling Administrative Tasks: If the trust includes life insurance policies, the successor trustee must collect these. They also set aside funds for any expenses related to the trust’s administration.
An executor is responsible for managing your estate through the probate process after you die. This includes locating and collecting assets, paying debts and taxes and distributing the remaining assets as directed by your will. This role ends once the probate process is complete.
A successor trustee manages your trust according to its terms and does not need court approval for their actions. Their responsibilities can last much longer, especially if the trust specifies conditions for distributing assets over time.
In the case of irrevocable trusts, you cannot serve as your own trustee. You instead appoint someone else to manage the trust. If this original trustee can no longer serve, a successor trustee takes over. The duties and powers of a successor trustee in an irrevocable trust are the same as those of the original trustee.
Selecting the right person to serve as your successor trustee is vital. This person should be trustworthy, competent and preferably younger to ensure that they can manage the trust for many years, if needed. This role can be demanding, so choosing someone to handle the responsibilities is important.
Appointing a successor trustee is an important element of a revocable trust. It prevents any delay in your trust going into effect. If you’re considering setting up a revocable trust or need help to appoint a successor trustee, an experienced estate planning attorney can help. If you would like to learn more about the role of the trustee, please visit our previous posts.
Reference: SmartAsset (May 30, 2023) “Successor Trustee: Duties, Powers and More”
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